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Guanxi Economics: Confucius Meets Lenin, Keynes, and Schumpeter in Contemporary China

Author

Listed:
  • Manfred Nitsch
  • Frank Diebel

    (University Center Latin American Institute, Free University Berlin
    Berlin School of Economics)

Abstract

The micro-foundations of the Chinese growth model are analysed within a comprehensive monetary theory of economic development, based on Schumpeter, Keynes, and the contemporary monetary Keynesians. The Confucian traditions and the Leninist party power structure are identified as the main specific traits of the social formation in contemporary China. In the capitalist mode of production, money sets the stage, and the interplay between private creditors and debtors is bundled into a coherent, dynamic whole by the central bank in the economic sphere and by more or less democratic institutions in the political arena. Combining the reproductive, care-taking traits of socialism with the entrepreneurial dynamism of private property and, above all, with the design and enforcement of overall social and economic coherence through the "vanguard" Communist Party makes an unique and ingenious institutional Chinese set-up. The constitutive character of Gu-nxi - the magic word for trust, confidence, reliability, righteousness, mutual benefit and cosmic order - for the working of the whole Chinese economic system is identified and described.

Suggested Citation

  • Manfred Nitsch & Frank Diebel, 2008. "Guanxi Economics: Confucius Meets Lenin, Keynes, and Schumpeter in Contemporary China," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 5(1), pages 77-104.
    • Handle: RePEc:elg:ejeepi:v:5:y:2008:i:1:p:77-104
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    Citations

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    Cited by:

    1. Hansjörg Herr, 2010. "Credit expansion and development – A Schumpeterian and Keynesian view of the Chinese miracle," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 7(1), pages 71-89.
    2. Malcolm Warner, 2014. "On Keynes and China: Keynesianism 'with Chinese Characteristics'," Working Papers 201402, Cambridge Judge Business School, University of Cambridge.

    More about this item

    Keywords

    China; Chinese Communist Party; economic growth; transitional economy; mode of production;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights

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