Historical Materialism review essay on Giovanni Arrighi’s Adam Smith
in Beijing (London:
Verso 2007).
Christopher Chase-Dunn,
Sociology, University of California-Riverside
v. 6/7/08 4369 words
Giovanni
Arrighi is an historical sociologist and one of the originators of the
world-systems perspective (along with Immanuel Wallerstein, Samir Amin and
Andre Gunder Frank).
His
latest book, Adam Smith in Beijing, provides a world historical
comparison of the trajectories of China,
Europe and the United States.
Arrighi revisits the classics of political economy to explain the rise of the
West, its eclipse of China
in the nineteenth century, the rise and decline of U.S.
hegemony in the twentieth century, and China’s recent rise to greater
centrality in the world economy.
Arrighi
contends that two distinct paths of economic and political development, which
he calls “capitalism” and “market society,” have allowed some modern national
economies to escape the Malthusian trap of population pressure and economic
stagnation. Capitalism is the path that
the West followed and market society is the path that has been followed by China. He also
contends that the Chinese Revolution helped to create the conditions under
which this kind of market society and paternalistic state could reemerge in the
decades since Mao’s demise.
Arrighi sees the recent rise of China
as a progressive development that might help to facilitate the emergence of a
more labor-friendly and less environmentally destructive world society.
There is a lot at stake here.
Arrighi is addressing the huge social scientific and political issues that are
brought up by the East/West comparison and by the continuing decline of U.S. hegemony and the rise of the Peoples Republic
of China.
He has produced a compelling world-systemic analysis that specifies both the
similarities and the important structural differences between the British
hegemonic trajectory of the 19th century and the U.S. hegemony of the 20th
century. His analysis in Adam Smith…
of the processes of financialization, neoliberalism and neo-conservative
“imperial over-reach” as efforts to prolong U.S. hegemony build on his own
earlier work and on studies by Robert Brenner and David Harvey.
Adam Smith in Beijing is dedicated to Andre Gunder Frank and Frank’s
influence is obvious throughout. Arrighi’s focus on China, and his rereading of
Adam Smith, Karl Marx and Joseph Schumpeter, was inspired by Frank’s last book,
Reorient (1998) in which Frank tried to overcome Eurocentrism by
re-examining world history from 1400 to 1800.
Arrighi’s new book not only rereads the classics but also makes great
use of a large corpus of recent scholarship that has been produced by a group
of economic historians who were also inspired by Frank (Kaoru Sugihara, Takeshi
Hamashita, Bin Wong and Kenneth Pomerantz).
These close studies of Chinese economic history show that there has been a
distinctive and dynamic East Asian path of development. This review will
outline the similarities and differences between Arrighi’s and Franks analyses
of the East/West comparison in world historical perspective.
Arrighi shows that the use of The
Wealth of Nations as a totem of neoliberal nostrums about the magic of
markets, the wonders of capitalist globalization, and the evils of state
regulation is just ironic poppycock produced by ignoring much of what Smith
actually said in The Wealth of Nations.
His contrasts of Smith with Marx and
Schumpeter, produce some very useful ideas for comparisons between the East and
the West. Smith’s distinction between “natural” and “unnatural” paths of
economic development is used by Arrighi to bolster the notion that China
followed the natural path of market society, focusing on labor-intensive forms
of development and on improving the domestic economy, whereas the capitalist
success stories of the West have focused on capital intensive development that
emphasized foreign trade, drew raw materials from distant colonies and made profits
based on providing “financial services” to the larger world economy.
Smith also focused mainly on the conditions that
allowed for national development, whereas Marx, like Thomas Friedman and many
of the other breathless portrayers of the wonders of globalization, assumed a
single integrated world market for capital and labor and a “flat world” in
which global inequalities would soon be reduced by the rapid and even diffusion
of capitalist development. Arrighi finds Smith giving advice to legislators
about the dangers of allowing big capital to dictate state policies that are
not in the interest of the nation as a whole. Smith also focuses on the
demographic and geographical features of each national society (the container
that is the state territory) as constituting important constraints and
opportunities for the possibilities for national development. Whereas Marx analyzed capitalism in order to
provide a theory that would be useful to the workers of the world, Smith
intended to provide a theory that would be useful to public-minded leaders of
nation-states about the best ways to develop the wealth of their nations.
Arrighi does far better than Frank
in seeing that there was a substantially independent East Asian international
system prior to the nineteenth century. Frank claimed that there had been a
single world system since the Bronze Age (Frank and Gills 1993). Surely there
were some important long-distance effects of prestige goods trade and the
diffusion of technologies back and forth across the Silk Roads in earlier
centuries, but Eastern and Western geopolitics and statecraft did not become
integrated into a single political-military interaction network until the
European states surrounded and tried to penetrate China in the nineteenth century.
Before that there was a substantially separate East Asian international system.
After describing the first Opium War in 1841, Arrighi (p. 341) says, “After a
disastrous war with Britain
(now joined by France), China
virtually ceased to be the center of a relatively self-contained East Asian
interstate system.”
The East Asian international
trade-tribute system has been well described in the studies by Takeshi
Hamashita (Arrighi, Hamashita and Selden 2003). China, far larger and more powerful
than any other state in the East Asian system, had called the shots but did not
engage in the kind of expansionist and imperialistic behavior that was so
apparent in the relationship between the European powers and their colonies.
Arrighi characterizes this as a pacific system relative to the international
system of states in Europe, where interstate
warfare was nearly continuous and huge world wars among the “great powers”
broke out whenever hegemony failed. Arrighi contends that the relatively less
contentious East Asian system was a consequence of the more inward-oriented and
less expansive mode of development in China, but he also admits that the
Chinese state was so large relative to the other states in the system that
challenges to Chinese hegemony were not likely to occur and were unsuccessful
when they did occur. Japan’s
occasional efforts to become the East Asian hegemon failed until after the
Europeans had brought the Qing dynasty to its knees.
The new East Asian world historians
argue that there was a dynamic East Asian model of development that was
distinct from that of the West and different from the usual Eurocentric
presumptions about a static Asiatic Mode of Production. They show convincingly
that commodity production, markets and money were highly advanced in China and that some regions within China, especially South China and the Yangtze river valley, were very dynamic in terms of
economic development in the 18th and 19th centuries.
Arrighi
supports the idea that there was an “industrious revolution” in China in the
eighteenth century in which intensive labor was used to produce commodities
instead of replacing labor with machines. This kind of market society was
characterized by Mark Elvin (1973) as a “high level equilibrium trap” in which
capital had little incentive to invest in labor-saving technology because labor
was so cheap. Arrighi and the new economic historians of East
Asia emphasize the upside of this for employment. But this does
not explain why the West was able to eclipse China in terms of wealth,
technology and military power in the 19th and 20th
centuries.
Frank had contended that China was the most developed center of the
Eurasian world system until 1800, and that Europe
had abruptly gotten the upper hand in the 19th century. Frank also argued
that the European advantage was unsubstantial and would be a brief interlude
that would soon be ended by a new rise of China. But Frank did not do what Arrighi has done,
which is to try to show what it was about the constellation of Chinese institutions
that were different from, and superior to, the institutional structures of Europe. Frank contended that the existing evolutionary
accounts of the rise of capitalism were Eurocentric nonsense. Instead he saw a
continuous logic of accumulation that was based both on state power and the
ability to make wealth by means of trade and production.
According
to this view states and wealthy elites have oscillated back and forth between a
greater emphasis on state-controlled economies in some periods, and a greater
emphases on markets and trade networks in other periods since the Bronze
Age. This logic of accumulation did not
really evolve. It is understood as a great wheel that goes around and around.
And after the 1970’s Frank did not see any possibility of a less exploitative
future mode of production. According to Frank,
China had been
the center for millennia and the European interlude was brutish but would be
mercifully short, but he had given up on
his earlier conviction that a socialist revolution might produce a new
kind of future society.
Arrighi’s analysis parts company
from that of Frank in a number of ways. Arrighi agrees with Frank that China was more developed in terms of technology
and institutions than Europe was until the end
of the 18th century, but he does not see the European rise as sudden
and completely conjunctural. Arrighi’s (1994) analysis of the development of
capitalism in Europe is evolutionary and begins in the 15th century
when Genoa, Portugal
and Spain
combined finance capital with an expansive intercontinental colonial expansion.
And while Arrighi’s distinction between capitalism and market society holds the
promise of future progress, it seems to be rather less of a qualitative
transformation to a much more egalitarian kind of social system than those that
have been depicted as possible by other analysts of capitalism.
Arrighi also supports the idea that one of the
main explanations of the difference between China and the West has to do with
the nature of class power over the state.
The idea of a capitalist state, in which merchants, industrialists and
bankers exert great power over state policy, was thrown out by Frank as so much
Eurocentric baggage. In The Long
Twentieth Century (1994) Arrighi had characterized the Chinese
dynasties as tributary empires that were becoming increasingly commercialized.
In Adam Smth … he presents the
Qing dynasty as a relatively benevolent welfare state that was trying to
protect peasants from exploitation by local landowners and by merchants. A key difference between the Chinese
dynasties and the regimes of Europe had to do with the greater influence in Europe that capitalists had over state policy in the
leading hegemonic core states. On p. 92
Arrighi says “Thus Smith’s ‘unnatural’ path differs from the ‘natural,’ not
because it has a larger number of capitalists but because capitalists have
greater power to impose their class interest at the expense of the national
interest.” And he goes on to say that, while this was not true for all the
European states, it was the situation in those states that were most central in
the European system – the hegemons.
In Volume
1 of The Modern World-System Immanuel Wallerstein (1974) noted a key
difference between China and
Europe in the “long sixteenth century” that
had huge consequences. He pointed out that China
had a central government – a “world empire” that could formulate and enforce a
single policy over a very large area whereas Europe
was a “world-economy” that was politically organized as a set of competing core
states. In the same years that the Portuguese King Henry the Navigator was
heading abroad, with Genoese support, to circumnavigate Africa for the purposes
of outflanking the Venetian monopoly on East Indian spices, the Ming Dynasty
was abandoning the Treasure Fleet explorations to Africa
in order to concentrate on defending the heartland of the middle kingdom from
steppe invaders. Central Asian steppe nomads had also repeatedly assaulted Europe, but there was no Emperor of Europe to tell the
Portuguese to desist because resources needed husbanding to defend against the
Central Asians.
Europe
had a multicentric interstate system in which finance capital was beginning to
play an important role in directing state policy (see Arrighi 1994 on Genoa,
Portugal and Spain), while China was turning inward to maintain its centralized
tributary empire. It was the weakness and small scale of tributary states in
the West after the fall of Rome that allowed capitalism to become the
predominant form of accumulation, while the strong tributary state in China,
run by mandarins and occasionally by semiperipheral conquerors, that repeatedly
succeeded in confiscating the wealth of those merchants or regional trading
dynasts who posed a political threat to the control of the state.
Arrighi
confirms that growing European power over China was not primarily due to the
cheap prices of European commodities that could knock down all Chinese walls.
Most European goods could not compete for the home and rural markets within China even
after the European states had forced the Qing regime to let them in. Rather the
main big advantage that the Europeans enjoyed was in military technology. Though Arrighi contends that the important
differences between Europe and China were due to the ways in which political
and economic institutions were combined, his analysis is not inconsistent with
the conclusion that the key question is “who controls the state?” In Europe capitalists came to control, first city-states,
and then the most successful nation-states. In China that never happened, though
it may be happening now for the first time.
One may ask what happened to capitalist efforts to gain state power in East Asia? Melakka, a Chinese ally in what is now Malaysia, was a
semiperipheral capitalist city-state in the sea-borne carrying trade (Curtin
1984). But there was also Koxinga, a maritime capitalist state in Fujian and
Taiwan that emerged in the 17th century transition from the Ming to
the Qing dynasties (Arrighi 2007:333-4; Hung 2001). But the semperipheral
capitalist city-states and maritime states were not as densely concentrated as
they became in Europe, where the Italian and Hanse city-states flourished to
create a regional maritime economy that influenced the emergence of national
states. Capitalists were not absent from the stage in East
Asia, but neither did they succeed in conquering the commanding
heights of state power as they did in the most powerful states in the West.
Recall that Arrighi contends that China was less imperialistic than
the West in earlier centuries, concentrating more on domestic development than
on global expansion. The East Asian interstate system with China at its
core was indeed somewhat less prone to interstate war than was the multicentric
European system of competing core states. As John Fitzpatrick (1992) pointed
out, despite a relatively great degree of centralization, the East Asian system
was still an interstate system that periodically broke down into smaller
warring states. These breakdowns were less frequent than the nearly constant
interstate wars of Europe, but this is may have been mainly due to the
preponderance of power held by the East Asian hegemon – China, than to
any difference in the modes of accumulation. An eight hundred pound gorilla can
keep the peace. Physical and human geography were undoubtedly relevant as
part of the explanation of why China
was able to re-erect a very large integrated state whereas, after the fall of Rome, Europe remained
divided into smaller nation-states. But
the relatively greater importance of the capitalist mode of production in Europe may have also played a role in maintaining the
multicentric structure of the European state system. The most capitalist
states, the European hegemons, were the power balancers that led the coalitions
that defeated those efforts that were made to convert the European state system
into a continent-wide empire (the Hapsburgs, Napoleon and Germany twice
in the 20th century).
But what of the political implications of
Arrigh’s analysis for the present and the future? On page 166 of Adam Smith… Arrighi notes that
“…hegemonic states play governmental functions at the global level,…” He sees an important trend in the evolution of
global governance by means of hegemony.
In the sequence from the Dutch hegemony of the seventeenth century, the
British hegemony of the 19th century and the U.S. hegemony
of the 20th century the ratio of the size of the home market of the
hegemon to the size of the world economy as a whole greatly increased. This quantitative trend is indicative of an
important qualitative evolutionary process in which each successive hegemon
internalizes ever more aspects of the whole process of global socio-cultural
reproduction and expands the size of the population that is incorporated into
its development project. Though Arrighi does not say this, his analysis implies
that a future increase in political globalization based on hegemony would
require a hegemonic national state that is significantly larger than the U.S. The fact
that there are no other states larger than the U.S. in terms of economic size
(the European Union is about the same
size, and China is much smaller) means that the hegemonic sequence as the
evolution toward a more coordinated and integrated form of global governance by
a single national state has probably come to an end. Of course a new period of hegemonic
rivalry and deglobalization is likely during the decline of U.S. hegemony.
Hopefully this will not devolve into another “Age of Extremes” of the kind that
happened in the first half of the twentieth century (Hobsbawm 1994). But eventual
further integrative evolution of global governance will require a condominium
of existing states, or even a multilateral global state. As Peter Taylor (1996)
said, the U.S.
is probably the last of the hegemons. Further political integration in order to
manage the massive global problems that have been created by capitalist
industrialization will require a capable multilateral, and hopefully
democratic, global state. This sheds a somewhat different light on discussions
of global state formation by theorists of a global stage of capitalism such is
Bill Robinson (2004).
China is not large enough economically, despite its
immense number of people, to become the next hegemon. And, as Arrighi carefully
explains, the current regime in Beijing
has made great efforts to avoid any discourse about hegemonic rise and global
leadership. He persuasively contends that the current Chinese leadership just wants
a level playing field upon which China can develop its economic
potential. These leaders are also quite sensitive and resentful toward
criticism from the West about the nature of their political institutions.
Arrighi, Frank and most other academics in the West have long acknowledged the
pervasive nature of Eurocentrism. Our lack of knowledge about East Asian
history has facilitated negative images of East Asian backwardness including
the Marxian notion of “the Asiatic Mode of Production” and these have served
well as justifications for colonialism and intervention. The apparent need of
Western political leaders for a bogeyman (should Osama Bin Laden have an
accident) understandably makes the Chinese leadership nervous. The Chinese
leaders are well aware that the racist imagery of the Yellow Peril and
China-bashing might again serve the agenda of Western political leaders looking
for a scapegoat for current or future catastrophes.
This said, the Global Left (Santos 2006) needs a good analysis of the possible
helpful, or not so helpful, roles that the Chinese people and current and
future Chinese governments might play in the coming decades. Arrighi’s analysis implies that the Chinese
development path provides a useful example for the rest of the world, and that
the rise of China
may help the rest of the world to reduce global inequalities and to move toward
a more sustainable form of economy.
It would seem logical that Arrighi’s depiction
of Chinese “market society” as a more
sustainable and labor-friendly form of society than that of the capitalist West
implies that other nations should emulate the Chinese model. in order to deal
with the issues of inequality and environmental degradation that capitalist
globalization has presented us with in the 21st century. But Arrighi
(personal communication) denies that he is saying this. He points out that the historical conditions
that produced the institutional complexes and culture of China today are impossible to
replicate, and also that the world does not need one model, but rather many
approaches. And yet it is important to ask whether or not the institutional
elements that Arrighi finds in China
are of use elsewhere in the efforts to construct more humane and sustainable
national societies and a democratic and egalitarian world society.
The
notion that China may be an
exemplar of contemporary egalitarianism in relations with the periphery would
seem to be contradicted by the situation in Tibet
and by the reports of many observers of Chinese projects in Africa. Progressive world citizens will not condone
China-bashing, and I agree with Arrighi that China is, and is likely to continue
to be, a somewhat more progressive force in world politics than many other
powerful actors. But what does the Chinese model of market society imply for
those who are looking for progressive alternatives to global capitalism?
Arrighi’s
effort to tease out the combination of economic and political instutional forms
that make the difference between better and worse forms of modern society is a
valuable start, but needs to be further developed. The contemporary global
justice movement that perceives a “democratic deficit” in the existing
institutions of global governance and in many forms of representative democracy
that exist within core states is not likely to find much worth emulating in a
paternalistic Confucianist state that the current Chinese regime seems to be
moving toward. The issue of democracy will not go away. It is unfortunate that
the neoliberals and the neoconservatives have used a discourse about
representative democracy and human rights to badger the Chinese regime, but
this will not make these issues go away for the global Left.
And the issue of institutional forms of
property also badly needs to be addressed. China is allowing the expansion of
private property in the major means of production and a reduction in
state-owned enterprises. But private versus state ownership of large firms are
not the only options. Investment decisions
in large-scale undertakings could be shaped by market mechanisms, thus
allocating capital to firms that are productive and efficient, while profits
are distributed to all adult citizens (Roemer 1994). The role of state in this
kind of market socialism is to redistribute shares to each individual at the
age of adulthood. Recent experiments in public
ownership have mostly been carried out in the context of “shock therapy” in
which neoliberal economists engineered a transition from former state-led and
centrally planned economies to capitalism. Populations have been issued
coupons, which are then rapidly bought up by a new class of capitalists, thus
proving that this kind of market socialism does not work. But a country like China could
carry out real experiments with market socialism in which the whole public
benefits from the profits of large firms while at the same time using market
mechanisms to allocate capital and labor. That would be a kind of market
society worth emulating.
Adam Smith in Beijing helps us to rethink the past and the future of
East/West relations and to consider the most basic issues about modes of
production that are centrally important for both understanding the human past
and for political action in the present and the future. It should be read
widely and debated, especially by those who think that another world is
possible.
References
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