The forgotten patrimonial capitalism
- By Gao Liankui
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E-mail China.org.cn, November 15, 2014
The success of the book "Capital in the Twenty-First Century" has puzzled many, largely because it tackled the patrimonial capitalist class, the core supporters of neo-liberalism, whose fallacies the international critics cannot afford to live with. The patrimonial capitalist class refers to those who inherit their wealth from their older generations.
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"Capital in the Twenty-First Century" is a book worth reading, because the patrimonial capitalism, as described in the book, will affect China's future sooner or later. |
Capitalism was once subdivided into industrial capitalism and venture capitalism. But "Capital in the Twenty-First Century" reminds us of the existence of patrimonial capitalism, or inheritance-based capitalism. This social class consists of a limited number of people but has a stunning amount of wealth. Their control over society is not inferior to the others, except that this stratum is yet to mature in China.
This is why it is too early to discuss patrimonial capitalism's influence over Chinese society, although the social group has been tormenting the Western society. Once industrial capitalism evolves into patrimonial capitalism, and even what is called parent-dependent capitalism, the nature of capitalism itself will degrade. For this reason, the book has caused quite a ripple in Western countries.
In Western countries, particularly the United States, patrimonial capital funds are the most renowned, influential foundations, which spend their money seeking advantageous policies from political circles and favorable research achievements from academics, although most of their self-proclaimed pursuits were philanthropy.
The patrimonial capitalist class are hardcore supporters of conservatism. Their academic donations mostly go to neo-liberalism, in which the ultra-liberalism school and the Austrian School benefited the most.
The Austrian School is a school of economic thought that is based on methodological individualism and typically serves patrimonial capitalism. Despite being marginalized in academics, the Austrian School has a greater influence in politics as well as the press - a bond forged by their constant funding and publicity efforts.
Industrial capitalists want a harmonious and stable society to ensure better business. Industrial capitalists promote social welfare and generally disapprove of direct democracy. By contrast, venture capitalists in China consist mainly of real estate developers and a few particular investors. Unlike industrial capitalists who eye long term gains, venture capitalists profit from short-term businesses. For example, developers are aware that their huge irregular profits may end sooner or later.
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