Historical Materialism 18 (2010) 110–129


Arrighi’s Adam Smith in Beijing: Engaging China
Flemming Christiansen
Department of East Asian Studies, University of Leeds f.christiansen@leeds.ac.uk

Abstract This contribution examines Arrighi’s effort in Adam Smith in Beijing to understand the trajectory of China’s political economy and the effects of that trajectory on the current reforms and changes in China. This article discusses these reforms from the perspective of China’s ‘internal’ dynamics and suggests that Arrighi’s argument has been developed without proper reference to China’s complex realities. As an alternative, the contribution proposes a researchagenda that could better account for these realities. Keywords China, political economy, Asiatic despotism, involution, capitalism

This contribution deals particularly with Arrighi’s coverage of China’s political economy, addressing the challenge of the title Adam Smith in Beijing. Arrighi considers China, with reference to Adam Smith, as an example of ‘natural’ and peaceful wealth-creation. Historical sources from the eighteenth century give credence to Adam Smith’s favourable view of China’s non-destructive wealth-creation in contrast to the violent capitalism of Europe and North America. Arrighi considers that the Chinese system represents a fundamentally different alternative to capitalism, and in his vision of the endgame he presents two possible outcomes:1 either China contributing to a benign commonwealth of nations, a great global convergence, or a cataclysm of humanity burning-up in post-Cold-War horrors. Arrighi bases his approach within the simple fundamentals of capitalism, which (here further simplified for the sake of brevity) include: (a) that market-exchange creates the conditions for capital-accumulation; (b) that government intervention in all cases conditions the nature and scale of this accumulation; and (c) that the labour-force is dispossessed of the means of
1. Arrighi 2007, p. 389.
© Koninklijke Brill NV, Leiden, 2010 DOI: 10.1163/156920610X489180

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production, so that it, along with other commodities, is exchanged on the market. He uses this basic framework to explain the extent and variety of government-intervention, in particular how Chinese and Western governments created different conditions for accumulation and how, ultimately, Western capitalism came to dominate the world-economy, defeating the Chinese alternative. It goes without saying that, in doing so, Arrighi abandons some conventional precepts in political economy in order to build up a coherent argument. The boldness of Arrighi’s book and the confidence with which it synthesises global developments make it exciting reading, and it should be commended for the way in which it shifts perspectives and brings in new judgements regarding China’s global role. That being said, it misses the opportunity to push the frontiers of analysis toward a more robust and meaningful explanation of China’s political economy. The main problem lies in the emphasis it places on a Western versus a Chinese ‘model’, taking Adam Smith’s simplistic dichotomy in The Wealth of Nations at face-value. This crude framework of China as the site of ‘natural accumulation’ stands in stark contrast to the sophisticated and circumspect debates on Chinese historiography (e.g. Kenneth Pomeranz, Philip Huang and Robert Brenner) that he cites at great length.2 These works indicate that geographical scale, resource-endowment, demography, and regional interactions need to be considered in order to inform a more fine-grained historical perspective. Most importantly, historians of China now follow G. William Skinner’s analysis of China as divided into nine large, interlinked macro-regions, each centred on a core and exerting centripetal pull on its periphery.3 This view allows us systematically and with longitudinal rigour to examine regional dynamics based on resource-endowment. Generalisations about China as a whole, of course, make just as little sense as generalisations of Europe, and a glance at Chinese jurisdictions (like the provinces) will convince us that they were (and are still) historically very unstable, and represent central-state dominance rather than ‘organic’ regional power, to the extent that their statistics even today mask rather than reveal real diversity. The significance of, for example, the ‘Upper Yangzi’, ‘Middle Yangzi’, and ‘Lower Yangzi’ regions vis-à-vis the ‘Southeast Coast’, ‘Lingnan’ and ‘North China’ may be obvious when one realises how today’s economic development corridor from Nanjing to Shanghai forms the core of the Lower-Yangzi region and the Pearl River Delta forms the centre of the Lingnan region, while the huge grain-producing alluvial North-China Plain is the centre of the North-China region. Their
2. Pomeranz 2000; Huang 2002; Brenner and Isett 2002. 3. The seminal work was in Skinner 1977.


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physiographic conditions are totally different, their markets are distinct, and the long-term historical trajectories of their economic development are conspicuous. The way they traded both with each other and internally is an important aspect of the history of China’s political economy, and is valid even today. Arrighi’s book, inspired by Adam Smith’s The Wealth of Nations, largely treats China as a whole. This is a major problem, for there are few statements of significant empirical value that can be made at that level about this huge and diverse country.

Labour, land, technology and ecological resources One point that stands out in Pomeranz’s Great Divergence and the debate arising from it4 is the importance of the relationship between labour, land, technology and ecological resources. Where Arrighi summarises these issues in terms of ‘low level’ and ‘high level’ equilibrium-traps (allegedly signifying the difference between a Malthusian and Smithian approach), it is worthwhile turning this conceptualisation on its head. Esther Boserup has shown that agricultural capacity is not a Malthusian limitation to demographic growth, but that demographic pressure invokes agricultural intensification in terms of labour and the application of new crops and technologies.5 Early on, large parts of China maintained dense populations, based on labour-intensive agriculture, which interacted in particular ways with off-farm production and markets. The equilibrium-traps, by focusing exclusively on the relationship between individual income and economic growth, miss the point that it is not just per capita income, but also per capita labour-effort and technological leaps (such as the introduction of new species – in Europe, the potato, and, in China, rice – or the choice between grain-crops and animal husbandry), that need to be linked to economic growth and have to be understood in the context of environmental resources. Borrowing terminology from Clifford Geertz, Philip Huang categorises this type of agriculture, which was focused on output per land-unit rather than per labour-unit, as ‘involuted’. Huang refers to the huge tolls on the population in the nineteenth century (due to the Taiping and Muslim uprisings and major droughts),6 which led to rapid social destitution. This destabilisation of China’s highly ‘involuted’ agriculture through warfare and the depletion of labour-resources has not yet been properly explored in the literature on China’s history. The collapse of
4. See in particular Huang 2002. 5. Boserup 1965, 1981. 6. Huang 2002, pp. 528–9.

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involuted agricultural organisation could, one may surmise, easily lead to the phenomena evident in the last part of the nineteenth century: poverty, seeming abundance of idle labour, and large tracts of land left unused. Arrighi does not take onboard many of the valid points made by Pomeranz about the development of transport for market-access, the limited access to energy-resources like coal, and the scarcity of timber-resources, which are of prime importance for understanding the diverse local conditions of economic growth at any given time. Instead, he argues at the level of abstract notions of the state, with little discrimination of regional difference within China, and largely ignores how economic institutions and social structures evolved over time. In addition, Pomeranz mentions (like many other scholars of China’s economic history) the existence, in various periods, of large capitalist corporations in China which, even if not sustained into developmental ‘takeoff’ like their European counterparts, suggest the need for deeper exploration. Arrighi also ignores the existence and significance of early long-distance Chinese trade in Southeast Asia, pre-dating the European colonial presence and later becoming an essential part of the Southeast-Asian colonial world. The question of why Europe, not China, initiated mutual trade is disingenuous, for such trade had existed indirectly for many centuries in Southeast Asia and (in particular after the 1690s) directly through Guangzhou as the main port – apart from, of course, the trade on the Silk Road. What is there to say, save that the Western powers grew frustrated as their commodities (other than silver) seemed to find no market in China at the prices they offered them for, while their traders made a good profit buying Chinese goods and selling them in Europe? The invention of the notion of China as trade-protectionist (due to its refusal to accept opium-smuggling) as a reason for breaking open the Chinese market by force is, of course, a prime example of ‘violent’ capitalism, but it does not explain why China did not do the same. Perhaps it was because there were few real incentives for the Chinese to risk investments on such ventures, or because the state-apparatus believed it had little utility; it is safe to say that it will always remain a matter for speculation. Arrighi’s use of the Zheng family in the mid-1600s as an example of a Chinese capitalist enterprise conducting international trade on a scale comparable and with methods similar to those of the Dutch VOC7 from their base in Taiwan serves as an apt contrast between the ‘natural’ and ‘unnatural’ models, even if the Zhengs were soon defeated by the Qing Empire.
7. Methods included monopolistic, colonialist trade in Southeast Asia, the use of Western ships and firearms, and their management-structure. Arrighi 2007, pp. 333–4.


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The evidence presented by Arrighi thus calls for a better and more sophisticated analysis of many diverse capitalisms, as the two ‘models’ end up being untenable caricatures. Focusing on the Anglo-Saxon-based global capitalism and its lineage alongside a vaguely-defined benign, ‘natural’ ‘Other’ exemplified by China, disregards the diversity of capitalisms in Europe (think of the historical diversity in Scandinavia and the Baltic, the Mediterranean, Eastern Europe and Germany) and grossly oversimplifies China’s history. Arrighi’s ‘natural’ model for China dries up around the Opium War in 1840, leaving an uncharted gap of one hundred and fifty years. During that period, China, in Arrighi’s analysis, seems only to exist as a function of colonial exploitation, while it should be obvious that these one hundred and fifty years witnessed hugely significant changes in China’s political economy.

A ‘gradualist’ transition? Arrighi, in his account of China’s ascent in the 1990s, claims that its main attraction for foreign investors was the high quality of labour-reserves in terms of health, education and self-management, and ‘the rapid expansion of the supply and demand conditions for the productive mobilisation of those reserves’, created ‘by a process of development based on indigenous traditions’.8 It is as if these processes were only there to serve-up China’s economy to global capitalism and did not have any significance in their own right. For somebody interested in understanding China’s development, Arrighi’s analysis is therefore disappointing. Predictably, Arrighi juxtaposes China’s ‘gradual’ approach to economic ‘transition’ with the ‘neoliberal’ practices prescribed for developing countries and the ‘shock-therapy’-solution applied in the transformation of the former Soviet Union. Applying only superficial analyses to this comparative analysis, he bases his position mainly on the work of non-Chinese industrialists, observers, negotiators and politicians. Consequently, his exposition never really gets to grips with the mechanisms at play in China during the reformprocess. For example, he does not consider the balancing of resources, demographic pressure (land, labour, food-security) and technological deficit that guided Chinese policy. These precarious conditions include, for example, the fact that 80 per cent of the population in 1979 lived in rural areas, of which one-fifth were in dysfunctional production-teams;9 that agricultural
8. Arrighi 2007, p. 351. 9. The lowest rung of the three-tier rural people’s communes.

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land-resources had reached the limit of their expansion under conditions of continued high demographic growth-rates (in 1979 1,033 square metres per capita and in 2006 only 930); or, for the latter figure, less than 9 per cent of the world’s cultivated surface feeding 21 per cent of its population), or that China’s industrial structures were unable to achieve the technological innovation and expansion needed to attain urbanisation, improved productivity, supply of technological inputs for agriculture, and thus longterm food-security. Even if Chinese ‘gradualism’ may in some ways seem more equitable and less destructive than the ‘shock-therapy’-approach, it is only so up to a degree. One could say that the difference between the Russian and the Chinese transitions is that between one instance of intense carpet-bombing, on the one hand, and a protracted programme of controlled explosions applied by demolition-teams on the other. The Chinese transition was no less destructive, or perhaps due to its meticulously planned nature, much more thorough in its ability to decompose the old. However one looks at them, the Chinese reforms cannot in any sensible way be characterised in terms of what Adam Smith thought of as ‘natural’, as a bucolic, ‘opulent’ idyll of organic trading relationships between rural and urban areas. Arrighi claims, of course, that the crux lies in state intervention; the ‘unnatural’ is violent and belligerent, paving the way for new ruthless accumulation and exploitation, while the ‘natural’ is guiding development towards construction and wealth-creation, which evoke less acute social conflicts. He also argues that the Chinese process of transition is in part ‘accumulation without dispossession’, yet a careful scrutiny of what has been and still is happening in China raises many questions about how rights and use of assets are regulated and defined. Rural land-use rights are very extensive, long-term (from the mid-1980s normally on 15-year, in the early 2000s extended to 50-year or even inheritable contracts, and by 2007 declared indeterminate), and linked with various policy-incentives, obligations and limitations of use. Transfer of contracts is possible with the permission of local authorities, but there is no land-market and no private land-ownership. Compensation for loss of land in the case of confiscation is calculated as a multiple of average annual farmincomes from the land, plus the value of houses and outbuildings on the land. This practice corresponds to, and is – through the lineage of the aborted Nationalist Land Law (1930), Sun Yat-sen’s writings, and the Constitution of the People’s Republic of China – inspired by Henry George’s ideas on counteracting land-speculation by confiscating ‘unearned increments’ on land-value. We need to fully appreciate how land re-allocation takes place (at the termination of contracts), and how state land-confiscation procedures


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actually work. The current scale of confiscation of farm-land for urban expansion indicates that ‘accumulation without dispossession’ is an inappropriate term, even if we are not talking about formal private ownership. Furthermore, if market-development and regulatory policies work to the effect that the value of assets and the viability of particular forms of livelihood are hollowed-out over a short period of time, we cannot talk about ‘dispossession’ in a technical sense, but it may have exactly the same effect. A narrow focus on formal notions of property and dispossession is thus certainly not helpful to an understanding of the dynamics and outcomes of the reform. Arrighi places the emphasis of ‘China’s ascent’ in the 1990s, while China’s reforms (according to the standard periodisation) began in 1978. Although he acknowledges the indigenous nature of the reform-policies, he does not in any way examine how the Chinese political system and its policies created opportunities for growth, and he shies away from assessing whether the logic of global capitalism holds sway, or whether strategic and skilful politicians and state-functionaries have been able to harness foreign capital to play a controlled, dynamic role in the development of the Chinese economy. On this crucial count, Arrighi fails to keep true to Adam Smith’s emphasis on government-intervention. His account, disappointingly, summarises outsiders’ observations of an invisible hand shifting the goal-posts for foreigners, while a deeper analysis of China’s reform-policies and the transformation of its political and economic structures is not only due, but already available in the literature.10 Arrighi ends up posing the question of whether the march of the ‘Washington-consensus’-phalanx – at a calm and firm pace and flying the banner of ‘neoliberalism’ – into the Chinese economy will ultimately defeat it, or whether China’s leadership will be able to form a benign global SouthSouth alliance that heralds a better world, based on Adam Smith’s ‘natural’ wealth-creation model. He does not address, in this context, the weak flank of the phalanx: namely, the US economic exposure in terms of cheap imports from China, budget-borrowing, bilateral trade-deficits with China and a credit-crisis that makes the US uncomfortably dependent on responsible action from the Chinese leadership in terms of monetary control and investment of sovereign wealth-funds.11 A fuller appraisal of the Chinese
10. See, for example, some of the works referred to in this article. 11. These issues exercised the financial media and the US administration during the first half of 2008. Among the publicly voiced worries the following interlinked issues stood out: although the Chinese authorities allowed the RMB to appreciate in relation to the USD, in principle easing the USD trade-deficit, the deficit in bilateral trade continued to grow; the activities of Chinese sovereign wealth-funds were seen by some as a threat to US national

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state, its economic policies, and its top corporate players is needed to fully appreciate how underlying international power-relations are changing. Adam Smith in Beijing is an interesting book that opens up some perspectives, but it is a story only half-told, and rather disappointingly so in its analysis of China’s political economy.

Do the Marxists do a better job than Arrighi? Outlining a research-agenda Although Karl Marx dealt with China in his writings, he never took its political economy seriously in his conceptual framework of modes of production. The notion of an ‘Asiatic mode of production’ was sidelined in the formation of Marxist political economy, as Marx and Engels failed to create a proper account of how China’s social and economic development took place. They used the term indiscriminately to signify state-control of agriculture, communal division of labour and communal property (see, for example, the Grundrisse) and, pointing at the characteristics of the ‘unchanging nature [Unveränderlichkeit]’ of Asiatic societies, often conspicuously as a contrastive reference-point when discussing European economic structures. Decisions of the Comintern in the 1920s, based on political expediency rather than analytical rigour, explained China’s historical developmenttrajectory in a clumsy adaptation of the so-called ‘five-stage’ theory, which essentially imposed Marx and Engels’s European perspective arbitrarily and became the foundation of Chinese Marxist thought. Karl August Wittfogel’s attempt to revive Marx’s ‘Asiatic mode of production’ in his book on Oriental Despotism12 failed to convince historians of China and political economists alike, not just because it went against Communist orthodoxy, but because the whole issue from the perspective of the critical Left seemed retrograde, implying that socialist countries like the Soviet Union and the People’s Republic of China were trapped in a tradition of moribund Oriental despotism. Critical political-economy analyses of the Soviet Union by, for example, Charles Bettelheim,13 deliberately evaded a similar analysis of Communist China, and it is only with the post-1978 reforms that new
security, but investments in core US assets were allowed because US institutions were experiencing serious losses due to the crisis of bad debts. There was strong unease in US financial circles that Chinese foreign-currency trade might manipulate the value of the USD, given the huge Chinese foreign currency reserves. 12. Wittfogel 1957. Wittfogel rewrote this book into English from the original Marxist analysis written in German (Wittfogel 1931) to ‘fit’ the anti-totalitarian, Cold-War debates of the USA in the 1950s. Some aspects of the history of this work may be gleaned from Greffrath et al. 1980. 13. Bettelheim 1950, 1974.


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critical approaches, inspired mainly by János Kornai,14 have been applied to China’s transition economy (by, for example, Victor Nee, David Stark, Carsten Hermann-Pillath, Louis Putterman, Thomas Rawski, and Dorothy Solinger, to mention a few).15 The understanding of China’s ‘premodern’ past has been dominated by a historiography dictated by Chinese Communist Party (CCP) ideological approaches; the crucial thirty years of public ownership and planned economy in what the CCP has termed the ‘primary stage of socialism’ have largely been ignored in serious debates in political economy, or rather regarded retrospectively as the starting-point of ‘transition’. The analysis of China’s ‘transition’ remains somewhat separated from most critical political economy in the sense that the findings from the Chinese case do not inform broader debates, but largely remain contained as a specialist field in the literature. It is thus no understatement to say that critical political economy, by and large, has been unable to deal with Chinese reality, be it historical or contemporary, in a satisfactory and cogent way. China is either ignored or subjected to the use of concepts that simply do not fit empirical realities. The urgent need to address China cannot have escaped anybody. Global integration and the availability of empirically-based research on China’s economy, politics and society by scholars working in Chinese, as well as a new wealth of data, mean that it is now necessary to piece together revised accounts of how China’s political economy has evolved. This involves the restructuring of some theoretical assumptions and shorthand notions as well as the need to understand the Marxist lineage in its linguistic and empirical limitations. It is essential to furnish a critique of its European scope of vision, which only allowed it to be anticolonial and anti-imperialist within a frame of a Eurocentric discourse – one only needs to refer to Marx’s writings in the New York Daily Tribune16 in the 1850s and his sporadic mentioning of China (and, more broadly, Asia) in Capital to appreciate that his understanding of China’s economy and history was essentially shared with Lord Palmerston and British traders. In this section, inspired by Arrighi, I shall provide some perspectives on how a more comprehensive understanding of China’s political economy might be shaped. As already mentioned, the effort to engage with the history of China’s political economy goes back to the early twentieth century at the least. The first major serious attempts were by Karl Marx, Max Weber and Karl August
14. Kornai 1992. 15. Nee and Stark 1989; Rawski and Brandt 2008; Putterman 1992, 1993, 1995; Solinger 1993; Herrmann-Pillath 2006a, 2006b. 16. Marx 1951.

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Wittfogel, driven by the urge to understand the different developmental trajectories between China and Europe, basically seeking to resolve the issue of why capitalism never took root in China. They all focused on the state’s repression of private property (and in those periods where it was in evidence, its relative weakness), even if their analyses and conclusions differed widely.17 Marx and Engels, in innumerable contexts, certainly stated that ‘private property’ was a precondition of capitalism – a view shared by both Weber and Wittfogel. The consequence for the analysis of China is that weak definitions/codifications of private-property rights – or rather, imperial measures to limit the ability of individuals to accumulate large privatelyowned properties – meant that capitalism, in a Marxist sense, could not develop. Whether or not this was due to the absence of rational legal systems (Weber) or the dominance of a ‘hydraulic bureaucracy’ necessary to deal with the complexities of water-engineering for rice-cultivation (Wittfogel), is in this context not particularly important. It is, conversely, important that one of the main issues identified in the history of the political economy of China is stated negatively as the absence of stable and continuous private ownership of the means of production, or rather, the absence of institutions of private ownership that allowed an emerging capitalist class to accumulate productive (or as Wittfogel calls it, ‘active’) capital. From a theoretical perspective it is not desirable to have a negative startingpoint. It may be more fruitful simply to ask two mutually interrelated and more universal questions, namely (a) how accumulation for expanding production took place, and (b) which forms of exploitation of labour took place (that is, how the surplus-product of the production-process was alienated from the producers). By posing the issue of what Chinese economic development did achieve (rather than what it did not), we will be better able to understand the institutions that created growth and a division of labour to match it. The questions about forms of accumulation and exploitation are at the level of abstraction where Marx and Engels would distinguish between modes of production (that is, defining the boundary between slavery, feudalism and capitalism). Furthermore, identifying particular politicaleconomic institutions, the focus should not be on whether or not they meet the criteria of definition or modes of operation expected in another context: they should be understood empirically in their own context and established theoretically on that basis. So, instead of measuring ‘market-exchange’ against the European phenomenon, we must explore its nature and function within China’s political economy.
17. Marx, Grundrisse and Capital (various sections on Asiatic despotism); Weber 1951, pp. 73–4, 147; and Wittfogel 1957, pp. 4, 78–9, 177–9, Chapters 8, 9, and 10 passim.


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Although Arrighi does depart from traditional Marxist exegesis, he is far too cautious in his analytical innovation, and he fails to pick up the many good insights provided by the historians of China he is citing. Pomeranz’s exemplary analysis of land-markets in China and Europe18 illustrates the historical and institutional complexity behind simple notions of ownership and selling and buying. He makes the simple point that, on balance, ‘China was closer to market-driven agriculture than was most of Europe, including western Europe’.19 Even though China’s laws and institutions of ownership and alienability of land could hardly pass scrutiny as ‘private-property rights’, their practice and context nonetheless constituted something close to private ownership. In terms of labour-markets, Pomeranz makes a similar point, namely that, by the eighteenth century or so, ‘China was probably somewhat closer to [a smoothly functioning neoclassical labour-market], and certainly not much further [than Western Europe]’,20 and he makes it clear that Chinese peasants were freer than European farmers to engage in off-farm production like handicrafts and petty industry.21 The implication is, of course, that even if higher-level political and economic structures differed, the basic-level transactional institutions and practices were, at the least, highly comparable. Thus, core concepts of ownership and the market that in critical Marxism define the boundary between different modes of production constitute, in the empirical examination of China, a range of dynamic and evolving economic institutions that make it difficult to use them as criteria for distinguishing between modes of production. In particular, because our understanding of exploitation rests on how markets in land, commodities and labour function, the de facto existence in China of market-exchange is important, providing the potential for conceptualising forms of accumulation and exploitation different from those of European capitalism (but not lacking its dynamic and developmental dimensions). In that sense, the archetypal capitalist employment-arrangement is only one manifestation of a broader palette of exploitative practices. Just as the ‘putting-out’ system represented a type of (early European) capitalist exploitation, it is important to understand how Chinese practices operated to exploit proletarianised workers by expropriating their surplus-labour. From an empirical understanding of these practices and their socio-economic integration, it will be possible for Marxists to theorise China’s political economy, stating the principles of its operation.

18. 19. 20. 21.

Pomeranz 2000, pp. 70–80. Pomeranz 2000, p. 70. Pomeranz 2000, p. 85. Pomeranz 2000, pp. 86–91.

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One of the great problems facing Marxist political economy in the analysis of China is the inability of historians based in the Chinese mainland to move beyond the interpretation in canonical Mao Zedong-Thought of the period after the first Opium War in 1840 as the beginning of a ‘semi-feudal and semi-colonial’ formation that neatly dovetails with the Marxist ‘five stages’ theory, but lacks any empirical credibility.22 In particular, of course, the People’s Republic of China was built on and justified within this ideological framework to the extent that the very structures of the state and the institutions of the economy were shaped according to logics derived from it. The main obstacle facing the study of China’s political economy is therefore the need to overcome dogmatic ideas that have severely stymied scholarship in a field where everything from the periodisations, core notions, organisation of source-materials and the collections of reminiscences have been systematically biased towards serving the interests of a victorious ideology. Thus, a Marxist political economy of China must adopt the methodologies of deconstructivist discourse-analysis to gain an understanding of the political economy of the first half of the twentieth century, liberating knowledge not only from the shackles of Maoism, but also from racialised accounts presented by major colonial powers. (Contemporary European and North-American sources on China’s economy at the time of the Opium Wars until the Second World War represented a largely colonialist view, based on cultural and ethnic stereotypes.) The task is tough, but there is substantial historiography and large amounts of archival materials yet to be appraised. As an example of existing scholarship that already lays a foundation for a better and more convincing political-economy analysis of China’s economic development, let us contemplate the evolution of the Pearl River Delta, the core of the Lingnan macro-region. Existing work by Robert Marks on South China offers an understanding of the dynamics of resource-endowment, types of economic and social organisation, markets, land-use, and so forth.23 Given approaches to the historiographical examination of Europe’s political economy, the Pearl River Delta represents a plausible scale to research on and
22. This is, admittedly, a bleak and unfair appraisal of Chinese historians and political economists, many of whom indeed deal with the ideological imperative by pushing the frontier into contested areas through meticulous empirical historiography and critical rephrasing of issues. Their colleagues based outside Mainland-China also contribute to a critical and de-ideologised approach by wresting terminology out of Leninist discourse and appropriating it for broader conceptualisation, perhaps most prominently Osterhammel (1986), who addresses the notion of semi-colony in a much broader framework. Alvin Y. So, a Hong Kong-based scholar, applies a broadly Marxist world-systems approach to Chinese political economy and history, providing significantly different perspectives. 23. Marks 1998.


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draw conclusions from; similar, to an extent, to examining the evolution of capitalism in the Lower-Rhine area, centred on cities like Antwerp, Rotterdam and Amsterdam, or Northern Italy’s early capitalism under the Venetian and Florentine statehoods, in each case allowing for physiological conditions, agricultural potential, hinterland and trading routes to form basic explanations of polities and economic institutions. Robert Marks’s analysis centres on the importance of ecological resources/environmental history; he is thus standing on the side of one of the most rewarding innovations in historiography that emerged in the late part of the twentieth century – innovations which also enlighten Pomeranz’s work, for example, but are totally ignored by Arrighi. The extensive literature on the history of the Pearl River Delta – on lineagestructures, the Opium Wars, the Red Turban insurrections, the coolie-trade, ethnic and cultural diversity, land-ownership, overseas-trade and linkages with overseas Chinese communities, the interaction with British colonialism in Hong Kong, the peasant-movements of the 1920s, the warlord-economy, the Land Reform of 1950–1 and the introduction of the planned economy in the 1950s, the people’s-commune-system and the industrial work-units, the establishment of the Zhuhai and Shenzhen Special Economic Zones and the transformation of Shunde, Dongguan, Foshan, Nanhai, and other places into motors of industrial development – covers all major aspects necessary for a well-grounded and credible Marxist analysis of the Pearl River Delta.24 This would, in turn, contribute to our understanding of China’s broader political economy, including dealing with the other macro-regions. Some of the themes that one could suggest by way of ‘blue-sky thinking’25 are to understand how social organisation was conducive to accumulation for the consolidation and expansion of production, and how surplus-value derived from labour was appropriated by economic and/or political élites. Within this, one may consider how structures and practices once established in circumstances of one form of accumulation or to organise particular types of production maintained their momentum, defining longer-term pathdependency. One of the most conspicuous patterns of social organisation in the Pearl River Delta was, from the fifteenth century, the lineage [jiazu]. My
24. Without even citing any examples of the vast and important literature in Chinese, the following small selection of relevant works may give an impression of the magnitude of coverage in the English language: Faure and Siu 1995; Faure and Tao 1996; Faure 1986; Hook 1996; Hsieh 1974; Johnson and Yuen-fong 1977; Leong 1997; Lin 1997; Lyons and Nee 1994; MacPherson and Cheng 1996; Marks 1984; Pasternak 1969; Potter and Potter 1990; Stockard 1992; Siu 1989; Vogel 1989; Wakeman Jr 1966; Watson 1985. 25. The suggestions in the following are deliberately speculative by way of seeking some topical approaches that may or may not lead to new insights in Marxian analyses of the region.

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suggestion is to further examine26 how the lineage-system structured production and economic transactions, putting at the centre issues like use of labour and land and the sharing of profit, and thus asking questions regarding ownership, tenancy and remuneration in terms of which economic transactions actually took place and how these were legitimised and executed by actors. It would seem that the lineage was very successful in establishing the sort of ‘involuted’, land-intensive rice-cultivating system needed to feed a large population under the conditions of limited land and readily available labour. Lineages produced family-units suitable for flexible growing of small plots and a large labour-force of non-kin who could serve as a necessary labour-pool. By investing collectively in land-improvement (irrigation and terracing of hills and poldering of delta-land) the lineage could more easily overcome the constraints of small farming households in terms of accumulation and investment. Lineages gained their political significance through embodying state-ideology (Confucianism, combined with ancestorworship) and paying tax in return for a territorial claim to farmland. The interspersed habitation of lineages and other social groups, quite often designated as outsiders or ethnically different, allowed the concurrent exploitation of core and marginal resources within the same market-regions; the sensitive issue of resource-conflicts was often dealt with in terms of ritual and cultural/ethnic-complementarity. The main problem of an ‘involuted’ system is not simply, as Arrighi argues, that further growth is impeded by falling individual returns on labour; its Achilles heel is that decline in labourinput below a certain threshold causes system-collapse; rallying at a lower level of labour-input may cause a serious decline in productivity per unit of land with the effect that even the decimated population is too large to feed. The Red Turban conflict in the 1850s seems to have involved a rapidly expanding system-collapse such as this, leading to resource-competition and the feeding of the coolie-trade (the bands of braves sold their captives to coolie-crimps in Hong Kong, while others chose to voluntarily emigrate in the face of the ever-deepening crisis). Lineages were successful in transforming themselves in relation to expanding domestic and local trade, enabling entrepreneurs and merchants to emerge from their ranks and forging close institutional links between rural and urban economies. The versatility of the lineage-system, at least in those parts of the Pearl River Delta where it flourished, at least precluded the institution of strongly secured private-property rights, in particular in relation
26. This has already been done to a certain degree by scholars like David Faure (1986) and Hugh Baker (1979).


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to land. Conversely, there is no doubt that it also prevented the strong division known in medieval and early-modern Europe between agriculture, on the one hand, and the crafts and commerce on the other. The implications of this for the development of ‘modern’ industrial capitalism after the revolution in 1911 still need to be fully assessed. In terms of rural development, the Chinese Communists embarked on a policy totally ignoring lineages and forced a perception of exploitation based on land-ownership in order to be able to break-up the lineage-structures and achieve a social structure amenable to the planned economy. The structures they instituted, although totally dissimilar to those of the lineage, also had as their main concern the creation and maintenance of a land-intensive structure able to feed a large population on limited land. Although the people’s communes appeared to be a ‘one size fits all’ solution, it was ingeniously geared to cater for very diverse types of agricultural production. After the reform started in 1978, the lineage experienced a revival, as it was a vehicle for interaction with overseas Chinese (many of whom were happy to liaise with the folks of their ancestral village, but felt political allegiance to the Nationalists in Taipei) – thus facilitating particular patterns of investment, trade and social development different from many other parts of China. It also allowed more local decision-making, enabling local economies to disentangle themselves from planned-economy structures comparatively swiftly. It is perhaps important to note that the Lingnan macro-region has now long ceased to be agriculturally self-sufficient and relies on imports from other provinces and from abroad to cover its needs, signalling distinctive features of this macro-region vis-à-vis others. Current forms of accumulation and exploitation need to be understood in terms of the path-dependencies from the last century; while I am happy to use the term ‘capitalism’ to describe the current situation in the Pearl River Delta, it is with the proviso that we put in the effort to understand its actual mode of operation. I hope this regional example indicates the scale of the necessary historical re-assessment of China’s economic trajectory. The greatest challenge, of course, is to document and critically analyse the period of central planning, which covered almost forty years from the early 1950s till the late 1980s, a period in which China’s political economy was strategically developed using core positions of Marxist political economy, in an attempt to realise a ‘socialist’ ideal. The nature of accumulation and exploitation in this period still needs to be researched and conceptualised, and we need to understand how administrative allocation of resources could replace market-exchange, examining the forces of command and power-structures in ‘socialist’ states. These were not the sort of policy-

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distortions that can be factored into simple equations (or gauged through the lens of ‘shadow-prices’), but were gigantic technocratic and bureaucratic apparatuses that not only defined the flows of resources, but determined in detail the structures of production, trade and consumption. Such structures throw up serious problems for the main conceptual frameworks of political economy, but unless they are tackled, we will never be able to gain a proper understanding of the transition-economy that followed in the 1980s and 1990s. Although some attempts have been made (by, for example, Charles Bettelheim,27 János Kornai28 and Michael Ellman29) to theorise ‘socialist’ economy, and some works by Chinese dissidents30 plus critical debates among the Cultural-Revolution radicals on the eve of the reforms,31 help towards an appreciation of its functioning, many existing works on the period have been too limited, some even meaninglessly judgemental, reflecting an effort to contrast the success of the post-1978 reforms. Current scholarship is slowly moving towards a revised view of the planned economy,32 but there is still a long way to go. A factor that has impeded a critical analysis of the planned-economy period is, of course, the outright ideological rejection of that model in mainstream Cold-War social science in the West, and the propaganda, distortion and secrecy imposed for a mixture of ideological and security reasons by the Chinese authorities. In spite of the relative lack of technological innovation in the planned-economy period, its outcomes in terms of basic human-development indicators like health (life-expectancy, infant-mortality, and so on), literacy and education, as well as social cohesion (high level of self-organisation), are, as pointed out by Arrighi, significant. The sustained ability (except for two years following the Great Leap Forward in 1957) to feed the population in a period when the population doubled and the cultivated area remained the same indicates that the planned economy was far from a stagnant and inefficient system. The strength of the planned system, in my view, is one of the legacies that allowed the developmental take-off in the 1980s and 1990s. The capacity to allocate and manipulate
27. Bettelheim 1950, 1974. Bettelheim’s works on China were particularly apologetic and must be seen as an ideological contrast to his work on the USSR; even so, they reveal interesting perspectives in spite of their weak empirical basis; see, for example, Bettelheim 1973, 1978. 28. Kornai 1992. 29. Ellman 1989. 30. Erjin Chen and the writers of the Li-Yi-Zhe wall-poster spring to mind: Chen 1984; Li Yi Zhe and Schier 1977. 31. See, for example, Delman and Christensen 1983. 32. Bramall 2007, Chapter 2.


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resource-flows through government intervention has been a hallmark of the reforms; the strategic use of ‘market-exchange’ to incite ‘private initiative’ has helped create rapid levels of economic development. The segmentation of China’s political economy into a mixture of (a) medium-sized private or semi-private companies operating in liberal markets, (b) large state-owned corporations dominating strategic sectors, (c) corporatist structures involving local government-domination of small rural enterprises and in the real-estate and property-development sectors, and (d) large informal sectors of the selfemployed in petty commodity-production and services has been managed and directed in ways that have allowed unprecedentedly high growth-rates. Arrighi’s emphasis on Adam Smith’s belief in government-intervention is therefore significant when we look at China’s reforms in the 1980s onwards, but its planned-economy predecessor and the trajectory from total government command towards market-operation are conceptually alien to the Smithian approach. The view of China’s global role must be seen in terms of how its political economy has evolved; while the view from within is important, its trajectory is certainly also determined by the global context, be it colonialism, the Cold War, or the ‘New World Order’. Defining China’s economic system as an outcome of external conditions violates common sense; China’s political leaders throughout the twentieth century sought to create conditions for feeding the nation and enabling economic growth, using the resources available to them – the nature of its economic system must be understood in terms of these priorities. The main differences between the 1970s and the early 2000s are (a) the decline of China’s territorially-defined self-sufficiency in resources, and (b) its increasing reliance on export-manufacturing to pay for energy-imports. The economic reforms have achieved economic growth, which has boosted domestic living standards and also been highly disruptive of extant social communities and economic structures through de-collectivisation, land-confiscation, mass-migration, urban mass lay-offs, the demise of the work-units and the increasing class-division of urban residential space. Although some Chinese officials and scholars speak the ‘neoliberal’ jargon fluently, there is still no sign that China has been wrenched open by the uncontrolled invasion of Western capitalism. Arrighi’s book is an attempt at exploring how hegemonic capitalism approaches its newest frontier, China. Arrighi rhetorically harks back to Adam Smith’s fleeting mention of China’s ‘natural’ and ‘peaceful’ wealthcreation (as a counterpoint to Marxist and Schumpeterian ‘destructive creation’), and he formulates the plot of his tale as a competition between these two forces. One could possibly argue that a detailed understanding of

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China’s political economy is immaterial for the account of capitalist hegemony in the world, but the discussion above has shown that a deep and critical knowledge of China’s history and political economy is not only necessary, but is available to anybody who cares to look. There is no reason to perpetuate the sin of ignorance and misrepresentation, and by giving his book the title Adam Smith in Beijing, Arrighi raised expectations that he would not only spin further on the old yarn, but would contribute with a new and more comprehensive understanding of the world including China, dealing directly and critically with China’s political economy and appraising its global importance in a much more creative and refreshing way. Alas, this remains a task for someone else to take up.

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