(Page 3 of 18) - Kinship Networks, Village Industry, and Max Weber authored by Peng, Yusheng.

environment.” From Granovetter’s idea of social embeddedness to economists’
institutional environment, the consensus is that even in the western “self-regulated”
market system, social relations between the rational and self-interested individuals are
important and inevitable. For instance, formal organizations always are enmeshed in or
countered by informal networks and cliques (Homans 1950; Dalton 1959); business
deals are often sealed with a personal touch (Macaulay 1963; Posner 2000:148-60); a
mix of arm’s-length and embedded personal ties with banks and contractors enables a
firm to obtain bank loan at a lower interest rate and increases its chances for survival
(Uzzi 1999,1996); even competing firms brew and benefit from personal friendship ties
among managers (Ingram 2001).

However, westerners and Asians do their networking in different ways. In the

west, it is through civic engagement, i.e., autonomous individuals participating in
voluntary economic, political, and religious associations, or parent-teacher association
(Putnam 2000). In Chinese societies, for instance, it is through real or imitated kinship
networks. The eminent Chinese anthropologist Fei Hsiaotung (1947[1984], pp.25-33)
observed more than half a century ago that whereas western society was organized by
voluntary associations, Chinese society was organized by guanxi circles, extending
from family (the core), to kinship, friends, localistic ties and so on, differentiated by
emotional and material depth of ties. The difference between Chinese and westerners is
not that one is relational and the other rational. Both are rational and relational. The
difference is that western rationality is more based on universalistic principles and
individual rights (jurisdiction) the Chinese rationality is based on particularistic
principles and obligations and patron-clientelism (the opposite of clearly-defined
individual rights). Weber (1947) would term Chinese rationality as substantive
rationality as against formal rationality. According to Hamilton, western universalism
and individualism can be traced to the Protestant idea of equality before God. The core
of Confucian teaching is differentiated attitudes toward parents, siblings, spouses,
children, kinsmen, friends etc.

Kinship networks epitomize the traditional Chinese social organization.

According to Weber, the elimination of clan organization and patrimonial authority in
the west during the Middle Ages paved the way for the rise of modern capitalism.
Protestant Reformation eroded patrimonial authority and, with its asceticism teachings,
injected individual rationalism into religion. The rise of the modern state replaced
“lineage charisma” with legal/rational authority. While being driven to a complete
extinction in the west, Weber (1951, p. 86; 1928, pp. 44-45) observed, the clan
organization was completely preserved in China and developed to an extent unknown
elsewhere in the world. The patrimonial bureaucracy of the ancient Chinese state was
never able to penetrate below the county level; consequently the traditional clan
organization and lineage system dominated rural society and were an obstacle against
rational business organizations and the emergence of modern capitalism:

Economic organizations which went beyond the scope of the individual
establishment rested almost wholly upon actual or imitated personal sib
relationships. First, we wish to consider the community of the tsung-tsu. This
sib organization owned, in addition to the ancestral temple and the school
building, sib houses for provisions and implements for the processing of rice,
for the preparation of conserves, for weaving, and other domestic industries.