4
Possibly a manager was employed. Apart from that, the tsung-tsu supported its
members in need through mutual aid and free or cheap credit. Thus, it amounted
to a sib and cumulative household community which had been expanded into a
producers’ cooperative. (Weber 1951, p.96)
The clan (kinship) organization provided so many of the individual’s social and
economic needs that it fostered individual dependence and discouraged individual
freedom.
2
The extensive development of auxiliary industries within the clan impeded
the growth of industrial enterprises that produce for market profits rather than for
consumption. And the effective elder power implied a steadfast adherence to tradition
and rejection of any sort of innovation. Partly due to these "sib fetters," even the
primitive form of capitalistic enterprises that matured in the west during the Middle
Ages has failed to emerge in China (Weber 1951, p.100).
During the 1950s and 60s, modernization theorists further elaborated Weber's
observation. Among them were two prominent China scholars, Marion Levy (1949)
and Albert Feuerwerker (1958). In his book The Family Revolution in Modern China,
Levy (1949:350-360) argued that one prerequisite of modern industry is
institutionalized universalism, but the "traditional" Chinese family was a highly
particularistic structure. "Wide spread particularism as much as any other factor is a
major obstacle to the spread of modern industry" (p. 354). Particularism "enormously
complicates" the operation of modern enterprises in two major ways. One is pervasive
nepotism in employment decisions where the first consideration was not competence
and qualification but closeness in personal connection such as family members,
relatives, friends, and localistic ties and so on. This apparently interferes directly with
efficiency. The second dysfunctional manifestation of particularism is the difficulty in
maintaining business relationship across organizations. Business transactions are not
carried out efficiently in rational and impersonal manners, but often have to be
smoothed with personal guanxi. Cultivating guanxi networks takes a large amount of
time and energy and brew graft and corruption.
3
Thus, Levy suggested that China
should rely on the national government to invest in and operate large industrial
establishments in order to achieve rapid industrialization because “there is a long
tradition of universalism in this sphere”(p. 361).
Coleman (1993) depicted the modernization process as a transformation from
primordial social organizations based on blood and personal ties to purposively
constructed organizations. Very much in line with Weber’s prediction of the
inevitability of rationalization and bureaucratization, Coleman predicted an inevitably
declining significance of social capital and social networks with the rise of formal
institutions. And he believed that this is a good thing (p.10).
The above argument can be summarized in the following hypothesis:
H1a. Kinship organization is an obstacle to the development of rural enterprises
in Chinese villages.
But this view has come under more and more challenge on empirical grounds. The
economic success of Asian NICs, particularly, Taiwan, Hong Kong and Singapore,
suggested that the family values in Chinese societies may not be incompatible with
modern industrial development (Wong 1985, 1988; Greenhalgh 1988). Wong , for
Convention