Can contemporary capitalism and democracy be distinguished? Are they incompatible?

Question

Can contemporary capitalism and democracy be distinguished? Are they incompatible?

Answer 1

Over the past three decades, China has undergone a historic transformation. Once illegal, its private business sector now comprises 30 million businesses employing more than 200 million people and accounting for half of China's Gross Domestic Product. Yet despite the optimistic predictions of political observers and global business leaders, the triumph of capitalism has not led to substantial democratic reforms.

In Capitalism without Democracy, Kellee S. Tsai focuses on the activities and aspirations of the private entrepreneurs who are driving China's economic growth. The famous images from 1989 of China's new capitalists supporting the students in Tiananmen Square are, Tsai finds, outdated and misleading. Chinese entrepreneurs are not agitating for democracy. Most are working eighteen-hour days to stay in business, while others are saving for their one child's education or planning to leave the country. Many are Communist Party members.

“Remarkably,” Tsai writes, “most entrepreneurs feel that the system generally works for them.” She regards the quotidian activities of Chinese entrepreneurs as subtler and possibly more effective than voting, lobbying, and protesting in the streets. Indeed, major reforms in China's formal institutions have enhanced the private sector's legitimacy and security in the absence of mobilization by business owners. In discreet collaboration with local officials, entrepreneurs have created a range of adaptive informal institutions, which in turn, have fundamentally altered China's political and regulatory landscape.

Based on years of research, hundreds of field interviews, and a sweeping nationwide survey of private entrepreneurs funded by the National Science Foundation, Capitalism without Democracy explodes the conventional wisdom about the relationship between economic liberalism and political freedom.

Reviews

"Kellee S. Tsai's exciting new book challenges the conventional wisdom about the role that entrepreneurs play in a reforming authoritarian state. Burrowing deeply into the informal practices of Chinese capitalists, Tsai questions mechanical, agent-less theories of democratization and reminds us that a term like 'middle class' obscures as much as it explains. With this book, Tsai takes her place at the forefront of those who study the relationship between marketization and democracy."—Kevin J. O'Brien, Bedford Professor of Political Science, University of California, Berkeley, coauthor of Rightful Resistance in Rural China

"In this very well-written and richly detailed book, Kellee S. Tsai offers a convincing critique of the common perception that privatization is leading to democratization in China. It should be widely read in the academic and policy communities."—Bruce J. Dickson, The George Washington University

"China may not be about to democratize, but—according to Kellee S. Tsai's impressive book—it is nevertheless experiencing significant political change. In showing how Chinese private entrepreneurs, through 'adaptive informal institutions,' have promoted fundamental ideological and institutional transformation, Tsai makes an important contribution both to our understanding of contemporary Chinese political economy and to larger comparative debates."—Elizabeth J. Perry, Henry Rosovsky Professor of Government, Harvard University

"In Capitalism without Democracy, Kellee S. Tsai offers a compelling idea—that the bourgeoisie does not necessarily become the standard-bearer of democracy, and shown this in a country where many

people expect that it will. She has also theorized a phenomenon long recognized but not explicated in Chinese politics—that of the impact of local, informal politics on formal political institutions and policy, and has used her theory to deal with major puzzles. Her admirably grounded models of regional diversity inside China should also have broader applicability."—Dorothy J. Solinger, University of California, Irvine

About the Author

Kellee S. Tsai is Professor of Political Science at The Johns Hopkins University. She is the author of Back-Alley Banking: Private Entrepreneurs in China, also from Cornell.