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Capitalism from Below by [Nee, Victor, Opper, Sonja]
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Capitalism from Below Kindle Edition

5.0 out of 5 stars 2 customer reviews

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Review

“The book is a story—rich and remarkable, yet readable—about productive economic institutions emerging as a by-product of individuals granted a little bit of wiggle room to pursue their interests. This one will be a point of reference for a long time.”
R. S. Burt, University of Chicago Booth School of Business

“Nee and Opper demonstrate how norms and networks promote economic development in the absence of good government policies. Their approach illuminates the phenomenal transformation of the Chinese economy and promises to explain other cases standard institutional theory cannot.”
M. Levi, University of Washington and University of Sydney

“A splendid book, brimming with ideas and full of important insights.”
W. W. Powell, Stanford University

“A thought-provoking book ...”
D. Acemoglu (MIT) and J. Robinson (Harvard University)

“Thoughtful and thorough.”
N. Desai, Economic & Political Weekly

“This well-researched, well-written volume will be a point of reference for many years to come.”
R.M. Ramazoni, Choice

“Capitalism from Below is a fabulous capstone to this body of work. It sets a standard for research in this field and will be essential reading for scholars of China’s reforms for a generation to come.”
D. Guthrie, George Washington University, The China Quarterly

“Capitalism from Below is a stunning book.”
M. Meyer, Wharton School, Administrative Science Quarterly

“A great piece of scholarship about the non-state sector in China over the last 30 years.”
K. Brown, University of Sidney, Asian Review of Books

“The basis for a new round in the ongoing debate over the political economy of reform.”
A. Wedeman, Perspectives on Politics

“This book will be useful to entrepreneurship scholars in general, and those studying institutional entrepreneurship and Chinese entrepreneurship in particular.”
S.F. Gohmann, Public Choice

About the Author

Victor Nee is the Frank and Rosa Rhodes Professor at Cornell University, and Director of the Center for the Study of Economy and Society. Sonja Opper is Gad Rausing Professor of International Economics and Business at Lund University.

Product details

  • Format: Kindle Edition
  • File Size: 8206 KB
  • Print Length: 431 pages
  • Publisher: Harvard University Press (19 Jun. 2012)
  • Sold by: Amazon Media EU S.à r.l.
  • Language: English
  • ASIN: B009KPP1NW
  • Text-to-Speech: Enabled
  • X-Ray:
  • Word Wise: Enabled
  • Enhanced Typesetting: Enabled
  • Average Customer Review: 5.0 out of 5 stars 2 customer reviews
  • Amazon Bestsellers Rank: #1,422,618 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
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Format: Hardcover Verified Purchase
This book provides a clear insight into the development of China's economic system based not only on previous theory but also on a huge number of qualitative research conducted through in depth interviews that provide a 'behind the scenes' insight into China's economic development from two authors who have spent a huge amount of time doing on the ground research to really understand the fundamentals behind China's rise to being an economic superpower.

Additionally, the book is concise, highly readable and overflowing with insights and quotes that would be extremely useful to any economics student seeking to understand more about China's economy or the role of institutions in economic development globally.
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Format: Hardcover
This is a great book for everyone interested in China's remarkable economic transformation during the last 30 years. The book is full of real life examples and most readers will find the book both interesting and easily accessible.

Many authors have claimed that China's transformation from a socialist economy to a capitalist economy was initiated by the central government. However, Nee and Opper show that it was local entrepreneurs rather than the central government, which began building new capitalistic institutions. Thus, rather than designing new capitalist institutions, the central government formalized private institutional innovations once they had proven successful.

The book challenges conventional wisdom as to how China has emerged as one of the most powerful economies of the world. But, it does so in a convincing and well argued manner. This is certainly going to become a classic study of how a capitalistic economy was created from below.
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Most Helpful Customer Reviews on Amazon.com (beta)

Amazon.com: 4.9 out of 5 stars 10 reviews
7 of 8 people found the following review helpful
5.0 out of 5 stars Great book on capitalism in China 29 Jun. 2012
By Professor Lawrence P. King - Published on Amazon.com
Format: Hardcover
This is a superb book about the emergence of capitalism in China and the Chinese economic miracle. It shows that capitalism in China emerged "from below" or by the spontaneous action of private actors adapting to their economic environment. The punchline is that the China economic miracle was not made by the Chinese state as many scholars claim. The state merely adapted to changes that began with sub-elites. The book is extremely well written, and is based on a very large and rich source of data from 800 firms. I will be using it in both my undergraduate and graduate classes at Cambridge.
4 of 4 people found the following review helpful
5.0 out of 5 stars A great book! 25 Sept. 2012
By Fredrik - Published on Amazon.com
Format: Hardcover
This is a great book for everyone interested in China's remarkable economic transformation during the last 30 years. The book is full of real life examples and most readers will find the book both interesting and easily accessible.

Many authors have claimed that China's transformation from a socialist economy to a capitalist economy was initiated by the central government. However, Nee and Opper show that it was local entrepreneurs rather than the central government, which began building new capitalistic institutions. Thus, rather than designing new capitalist institutions, the central government formalized private institutional innovations once they had proven successful.

The book challenges conventional wisdom as to how China has emerged as one of the most powerful economies of the world. But, it does so in a convincing and well argued manner. This is certainly going to become a classic study of how a capitalistic economy was created from below.
3 of 3 people found the following review helpful
5.0 out of 5 stars The morality and heroics of Chinese capitalism 28 Oct. 2015
By Ross W V Milburn - Published on Amazon.com
Format: Hardcover
This book explains the rise of China in a completely new way, and is a unique contribution to our understanding of economics. Capitalism from Below resolves the question of whether private production and markets are a natural expression of human society, or whether they depend on state laws and regulations to safeguard the rights of investors and consumers.

In the West, we know from the history of the Industrial Revolution, that the new entrepreneurs that started factory production did not generally come from the aristocratic land-owning families that had held wealth in the feudal period. Instead, individuals from modest backgrounds started small business that grew rapidly, based on mechanization.

But in China, the Communist Party first permitted only state industries, and the economy failed dramatically. The public has been given the impression that, after the reforms of Deng Xiaoping, the state altered its strategy and set up the institutions that enabled a change to capitalist production and markets.

But this book is a scholarly work based on studying hundreds of firms, and extensive interviews with 111 Chinese entrepreneurs from the Yangzi River delta, now the hub of global manufacturing. It clearly shows that the Communist Party still discriminated against private firms, and that entrepreneurs overcame this resistance to create major corporations that now account for over 70% of the country’s gross national product.

The individuals responsible for the growth of China’s mighty capitalist engine were not wealthy, highly educated, or politically well-connected. The authors explain: “In towns and cities, unemployed youths, demobilized soldiers, and other marginal actors started small private businesses. They learned how to bypass the state-owned banking system and accumulate the start-up capital they needed, and how to set up supplier and customer networks in an economic environment still dominated by state-controlled supply and distribution channels.”

It was only after these capitalist start-ups became an emergent social and economic force in China that central and local government began to put in place the legal and regulatory structures to legitimize private enterprise.

How did Chinese society support the growth of private capitalism against the wishes of the all-powerful Communist Party? The simple answer is through the maintenance of trust and the other social norms necessary for successful trading by peer pressure within the business network. The fact is that information sharing, mutual monitoring, and community sanctions support integrity in business relationships better than do laws and regulations.

Capitalism from Below is 431 pages, including 168 pages of notes, references and appendices, and it is a formal work printed in small type, so I don’t recommend it for holiday reading. But if you want to know why the market always wins against the state, it’s a valuable investment.
7 of 9 people found the following review helpful
5.0 out of 5 stars What drives the Chinese economy? 7 Aug. 2012
By Borje Ljunggren - Published on Amazon.com
Format: Hardcover
China is often described as the "factory floor of the world". But we all know, that it would be fatally wrong to reduce the Chinese economy to such a basic role in the global supply chain. China is quite a bit more than that, and increasingly so.
In an often quoted article in Foreign Affairs (1994), Paul Krugman wrote that the Asian economic miracle was a result if perspiration rather than inspiration, capital and cheap labour rather than productivity growth. In the case of China it is clearly a matter of both, extreme investment levels and tens of millions of migrant workers but also impressive, even though declining, productivity growth.
What is then driving the Chinese economy? When addressing that question, most economists focus on the macro picture, government policy, structural reforms (and, in recent years, the absence of such reforms), and on the role of big state owned enterprises and financial institutions. Politicians are seen as central arbiters of institutional change.
Innovation becomes a matter of government funding of R&D, the number of patent applications and scientific papers, the number of university graduates and university rankings. Quantitatively, the numbers are all very impressive, qualitatively the picture seems less than complete.
In their path-breaking book Capitalism from Below - Markets and Institutional Change in China, Victor Nee and Sonja Opper are turning the table by looking at the entrepreneurial dynamics at the grass root level. During a period of six years (2006-11), they twice surveyed more than 700 MSEs in the Yangzi delta region (with Shanghai, Zhejiang and Jiangsu). Their main finding is that China's success to a much larger extent than generally assumed is the result of the entrepreneurial ability of MSEs than the performance of SOEs: "Local knowledge gained through a cumulative wealth of manufacturing experience, in combination with regional markets for new technology, contributes to rapid cycles of innovations" within close-knit and highly specialized business communities. This development has driven "bottom-up institutional change" that has facilitated the private sector's autonomous growth decoupled from the mainstream state-controlled economy. The political elite has followed up by legitimizing what already has taken place on the ground. Indeed, a fascinating story, for other scholars to digest - and challenge.

Borje Ljunggren
Former Swedish ambassador to China and author of Kina - vår tids drama ("China - the Drama of our Time").
2 of 2 people found the following review helpful
5.0 out of 5 stars Capitalism from Below 19 July 2012
By DMozingo - Published on Amazon.com
This is a study of the explosive rise and expansion of private enterprise following the post-l980s economic reforms in China. Based on massive research in 7 different regions of the Yangzi Delta and in-depth interviews with the founders and key officers of more than 700 companies CAPITALISM FROM BELOW (by Victor Nee and Sonja Opper) is a path breaking examination of the etiology of capitalist formation. At the same time, it is an outstanding demonstration of the analytical potential comparative social science theory and methodology possess when wielded by scholars of this caliber. Their book belongs on the shelf of everyone following the forces driving contemporary China, including those more broadly interested in social theories of institutional adaptation.

The type of private enterprise Nee and Opper observed belongs to a genre whose foundational elements differ from "class-based" or " top-down" models of development. These have long viewed the existence of economic enterprises in most countries as fundamentally creations and dependencies of the state, in that the state alone exercises control over the long chain of crucial material and regulatory inputs enterprises of any significant size need in order to survive. Nee and Opper's evidence reveals, however, that in the highly diverse Yangzi Delta, the primary "actor" was not the state, but thousands of small, independent, mostly rural, determined, minimally financed and relatively inexperienced individuals, family members or small partnerships, essentially disconnected from the economic apparatus of the state.

Following the decollectivization of agriculture, small scale entrepreneurs found opportunities to start private or household-level businesses in rural and small town communities. Traditional arts/crafts and low-tech consumer products of little impact on markets were permitted even under pre-reform policies; but the dividing line was becoming less clear. These new entrepreneurial types, many living in high unemployment areas, tested and found gaps or loopholes in the existing socialist order which could be exploited to open small businesses, even though the economic reforms were intended only to revive a stagnant socialist economy, not to promote free enterprise.

Why did the long arm of a socialist state not act to prevent this, especially after the movement had gathered momentum? The raw facts suggest the new entrepreneurs were careful not to give challenge directly, and as the spread of these profitable new firms reduced unemployment and increased tax revenues of financially strapped local government, overall the communist party could benefit and essentially look the other way. By the mid 90s co-existence between privately-owned and state-owned enterprises became a reality.

But the deeper truth lies in the evidence and the analysis of the authors' comprehensive survey research data mapping the actual behavior of the main actors leading these firms, and how over time they interacted with other social/economic units and groups in their communities. What emerges --- and has important relevance for future studies of societies in transition --- is the primary role of "endogenous" processes, propelling the formation of informal networks and ad hoc institutions that, independent of state action, arose to supply the necessary commercial infrastructure components. It was these new private associations that provided the sinews of capitalist formation: access to capital and finance, rare and semi-finished materials, labor, mechanisms enforcing contracts, market outlets, distribution channels, etc.

Businessmen like the present writer working in China during this period observed firsthand the consequences of the emerging private sector. Few if any understood the underlying social dynamics driving the process, in particular the extent to which these endogenously developed informal norms and institutions had actually created resources to replace the state in the commercial economy. With the exception of projects requiring sophisticated manufacturing --- which were the high value projects dominating the agenda of the Chinese government of that time --- the upstart private sector soon rivaled, then largely replaced the commercial options offered by the established state production and trading corporations, especially for export contracts. Moreover, the startup sector, being "closer to the ground," saw and responded to widespread, unmet consumer demands for new products and services at the lower end of the market place, both domestic and foreign, that had been largely ignored for more than thirty years. From nearly primitive beginnings, capitalist enterprises now dominate all but "strategic" sectors of the economy, and account for the greater percentage of GDP, employment, income, state revenues and other measures of national wealth.

In China there was huge, untapped demand for low-tech consumer products, quite independent of potential export markets, demands the state, for various reasons, did not address. It required the unplanned, independent and individual initiative of thousands of incipient entrepreneurs acting through exogenous, informal networks, to unleash production and distribution entities capable of meeting these demands. Nee and Opper have established a persuasive theoretical construct and analytical framework for exploring, empirically, how this process has been unfolding in China, including a brilliant research design for the study of other transitional societies grappling with poverty, limited resources, power and how to create the capital formation needed to move forward.

Submitted by:

David Mozingo, PhD, Califas (US) Ltd.
Formerly Professor of Government
Director of the China/Japan Program, Cornell University
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