Comparative Perspective on the Influence of Money on Contemporary Political Regimes:

China versus United States

      As societies and political regimes begin to face new challenges in the economic sphere the role of the economic structure within a country’s political development appears more apparent than ever. The position of money within political regimes has continued to be a factor regarding regime development, but with the rise of capitalism this role has become increasingly important. Karl Marx and Barrington Moore provide a theoretical perspective on the emergence of capitalism and its affects on political development that is applicable to current and future developments. The initial observations of Marx and Moore are essential when examining the influence of economic structure on the development and growth of both the United States and China, two countries that have stark political differences yet stand as major economic powers. Examining the expansion and growth of two countries, which appear drastically different, is essential in order to unravel the influence of money on current developments, no matter how separate the paths, and more importantly future developments. Although these countries have followed opposite development paths, they have emerged as some of the strongest economies and therefore find themselves compared often.

      Authors Montinola, Yingyi, and Weingast examine the growth of China in the article “Federalism, Chinese Style”, discussing the unusual path that China has taken economically and politically. These authors argue a new kind of federalism which China has undertaken, that which creates a division between the central and local governments. This shift has allowed local governments to have control over economic matters within their jurisdiction, which the authors argue creates “an important degree of political durability built into the system”(53). Specifically, the market preserving economy China has developed has in turn shaped their political structure. Under a market preserving federalism subnational governments have authority over the economy, revenue sharing among governments is limited and the national government have the authority to police the common market. These factors “limit the degree to which a political system can encroach on markets” (55), therefore allowing a balance of power between each level of government. This type of economic system allows for greater competition within jurisdictions, extending production, capital and labor. The 1980’s marks a period when many of these economic changes were being made, including a revenue sharing system. The authors argue that, “these changes provide for substantial independence of the governments in China…which ensures that governments in each region assume primary responsibility for economic development in that region. Hence, these governments possess both significant fiscal autonomy from the central government and considerable independent authority of their economies” (64). These economic reforms have been gainful for a great deal of the Chinese population and so far have proven themselves to be durable. These economic reforms have in turn shaped the political structure, making for the rise of local governments and what some may argue as the weakening of the Communist Party. While there are downfalls to this “Federalism, Chinese style”, these reforms have been a “tremendous asset, not only in terms of economic benefits achieved, but also in terms of political institutions restructured” (81), solidifying the notion of interdependence among a society’s economic structure and political structure.

      Barry Weingast in his individual article “ The Economic Role of Political Institutions: Market Preserving Federalism and Economic Development” maintains the same argument surrounding the rising role of the local governments within China. He continues to note the strong correlation between economic development and regime alteration and reform. He concludes that, “the critical economic role for political institutions is to provide the appropriate foundations for policy making and secure system of economic and political rights “(28).

      While Montinola, Yingyi, and Weingast examine an altered version of federalism in China, Hadas examines an altered version of Marxism in China in his article “Can Communist China drop Marxism”. Hadas argues that China has adopted a Deng version of Marxism, which has allowed for economic growth, but has constrained civil society. He notes that by constraining civil society, the economy which eventually be hurt. In the article, “The other Moore’s law”, Moore’s theory is applied to the rising middle class in China and ultimately the conclusion is “not how much disruption will be caused by the growth of the middle class but by its possible decline, at a time when global recession is pushing some of those who have joined it back into poverty.” Clearly, the theories of both Moore and Marx are not only still relevant today, but are specifically applicable in researching China.

      Multiple researchers have examined the changing dynamics and success of China both economically and politically, making it apparent that there is not one Western formula for economic and political success. China has taken on different economic reforms which have proved to be successful, but these have also solidified a different political structure, one which is starkly different from the democratic regime in the United States. By examining the different paths of two successful economies, which still operate in the same international economy current regimes can be examined in a new light.

      The United States, unlike China, has been defined by its capitalist society which is often equated with a democratic regime. American history has a strong economic undertone as capitalism and wealth have arguably been the base of development in the United States. America is often defined by its economic success, with its continuous rise of big business over the past century. Arthur Chandler researches the rise of these big businesses in the US, noting that they precede any political change or shift. The pattern has continually been that economic success or decline has resulted in political development or change, emphasizing the major role that money and capitalism plays within American political culture.

      Gabriel Almond argues that capitalism supports democracy in her article “Capitalism and Democracy”, which she believes is held up by previous research and theory such as that of Barrington Moore. Furthermore, she specifically believes that market oriented economies are necessary in a democracy, a notion which China is now challenging. While Almond notes the connection between democracy and capitalism, specifically in the US she also notes conclusions made by theorists such as Schumpeter who acknowledge the tension between the two. Almond outlines four main themes: democracy fosters capitalism, democracy subverts capitalism, capitalism subverts democracy and capitalism supports democracy while using the likes of Schumpeter, Dahl, Moore and Smith to support of rebut these themes. By examining several perspectives on the role of capitalism it is clear there is no definitive answer when it comes to the absolute role of capitalism in democracy, but it is clear that capitalism has played a defining role in the political development within the United States.

      Although China and the United States may seem to have little in common, their economic success has led to their increasing transparency and international strength. These two countries reveal that economic success can be driven by a multitude of factors, but can drive major political development, even if this development means communism and democracy.

Now the question is being raised of how these two countries will interact together within the international economy.

Look to our perspective on International Relations to discover more about this!