units are coerced into selling in order to buy, buying in order to survive and reproduce, and ultimately to expand and innovate in order to at least maintain their economic position in relation to other production units (R. Brenner 2006). Under these conditions, it is necessary to produce goods for the market, rather than directly satisfy reproduction requirements and to accumulate capital, that is, to use the surplus product to expand production. The associated movement represents a specific feature of capitalism “because there is absolutely no way of measuring adequate valorization. [This] corresponds with the tendency to increase both the degree of valorization (i.e., increase in the profit rate …) as well as the size of capital to be valorized (i.e., the accumulation of the target profit, whether as investment in productive or in interest-bearing capital)” (Heinrich 2003, 314–15, my translation).
Moreover, capitalist market dynamics can be regulated only to a certain degree. At the same time, capitalist market economies are steered not only by market-based processes, but also through other coordination mechanisms: (company) hierarchies, networks or clans, associations, and state institutions. In this sense, the institutional preconditions and contexts under which the imperative to accumulate is effected determine the cooperative and competitive relations between enterprises. These can include different fractions of capital or business alliances, when specific interests of enterprises unite and become associated with one subjective interest.
THE VERTICAL AXIS OF CAPITALIST SOCIAL RELATIONS
The structure of labor relations, the associated forms of division of labor, as well as the emergence of corporatist industrial relations make up a further basic component of capitalism. The unstable dynamics of capitalist systems do not result solely from the horizontal relations between companies operating in markets. Social stratification and particularly the vertical “class polarization between those who possess wealth and those who do not and the structural social tension created by this” is a further “objective basic condition of capitalist dynamics” (Deutschmann 2009b, 38, my translation; see also Wright 1997). Capitalism as a social order rests on the particularistic appropriation of the goods produced, which, in turn, has no basis in any previously agreed social consensus.18 The dependency of (competing) blue-collar and white-collar workers on the demand for labor and the capital owners’ control over the means of utilizing labor power along with their right to appropriate the surplus product produced by the wage earners establish a specific character of dominance within the wage labor relation. This also limits the opportunities for participation in economic decision making, planning, and control processes with respect to production, distribution, and consumption.
Historically, institutional mechanisms have been established to try to moderate the polarization of the classes; these comprise diverse varieties of corporatism, that is, processes of coordination and negotiation between employers, workers, and the state. Associated with such mechanisms are prevailing, albeit contentious, norms and values (see Burawoy 1985; Wright 2000). On the other hand, class polarization can be a strong incentive for upward mobility and can foster the competition for innovation. This social tension translates into increased economic activity especially in a situation where the structural class-polarization appears to be individually surmountable (Deutschmann 2009b).
RELATIONSHIPS OF MONEY AND FINANCIAL SYSTEMS
Capitalist social orders rely on monetary and financial systems. Money mediates the exchange of goods. The circulation of industrial capital, for instance, gains its characteristic elasticity through the credit mechanism or the sale of shares. Money, however, not only mediates exchange processes, but can, in the form of financial capital, take on a life of its own (Marx 1986). Because the expansion of capital accumulation depends on credit, modern credit relationships include, in a sense, the commodification of the future. “Capitalism, in other words, is more dynamic than other economic systems because it has found ways to turn promises and expectations into presently available resources, enabling the economy at any point in time to invest and consume more than it has already produced. By creating binding obligations for individuals to devote long stretches of their future lives to working toward paying off their debts, the economy redeems the advances it continuously draws on its future production. While profit is the carrot of capitalist growth, debt is the stick” (Streeck 2010b, 25).
Additionally, in historical forms of capitalism, money, or money transformed into capital, is by no means restricted to playing an economic role; rather it embodies a source of utopian promise and can assume the function of representing the “unity” of society. “As already recognized by Simmel, money is the basis of modern, functionally differentiated association. Law, science, and politics are not possible without organizations; but organizations are not possible without money. And finally: by transforming personal dependencies into functional ones, money allows individuals to find themselves through their estrangement from the anonymity of money. Thus money is not only the basis of the organized social framework but also indirectly of the intimate one” (Deutschmann 2009b, 20, my translation).
Further, the level of state influence on the financial and banking sector becomes a central determinant of the depth of state penetration in the economy.
THE ECONOMY AND THE STATE
On the basis of the historical finding that companies and markets cannot provide continued self-regulation, that a market road to a market economy is not feasible (Polanyi 2001), and a strong state was an essential historical precondition for such a transformation and its stabilization, a central proposition of my work is that the party-state in China is not withdrawing from the tendency toward marketization, but instead is contributing to the constitution of a new form of capitalism. In this sense, the party-state must itself be understood as a central component of the new Chinese capitalism. Because the interactions between economic and political actors embody complex processes, which (not only in research on China) are discussed in very different ways, the fourth dimension of capitalist social orders will be introduced at greater length at this point. First, I will outline the basics of modern statehood, second, forms of state intervention and regulation, and, third, actions of political actors where they directly perform entrepreneurial functions. Here, I advocate going beyond abrupt juxtapositions of market and state and instead examining how economy and state are structurally linked and, to some extent, develop historically in a mutually constituting manner.
(1) The mutual dependency between state and economy can be taken as a central feature of capitalist societies. Economy and politics establish a nexus characterized by structural interdependencies (see Block 1994; Brand 2006; Hirsch 2005; Mann 1998; Offe 2006; V. Schmidt 2009). The state sanctions contractual relations, directs and/or coordinates infrastructure measures, and provides business enterprises with an educated labor force. Unlike nonhierarchical forms of regulation and decision making, the state, for its part, frequently “possesses the means for ultimately decisive intervention” (Mayntz 1996, 159, my translation), whether in the form of legal ratification or the final decision in cases of nonagreement. This is because only the state commands a monopoly on power that enables the creation and maintenance of the institutional fundaments that allow capitalist socialization in the first place. For this a functioning state requires (at least relative) independence from the social classes, associations, and so on, even if, in practice, state power is mediated by both societal institutions and discourse. Because state institutions represent an arena for social conflict, attempts are constantly made to instrumentalize them.
Certainly, it is not only the enterprises that are dependent on state institutions; conversely the existence of individual states depends on the successful activity of enterprises on its territory (and beyond). Political apparatuses are structurally dependent on successful accumulation within their territory, because this secures the basis of tax assessment. For this reason “the general and top political avoidance imperative is to forgo or prevent anything that could endanger economic prosperity. Positively formulated, the state must establish, maintain, or recreate a ‘healthy investment climate’ in order to prevent enterprises from making use of their ‘negative rights of ownership’—the right not to invest” (Schimank 2009, 259, my translation).
