Socialism and the private sector: The making of ‘socialism with Chinese characteristics’

In the late 1970s, the Chinese government launched an ambitious program to promote private sector development – after decades of suppression and violent condemnation of anyone engaged in private capitalism. A study carried out at the Vienna University of Economics and Business investigates the precarious work done to reintroduce economic activities that had previously been considered illegal, immoral, and anachronistic. The study finds that such seemingly ‘transgressive’ change was facilitated through the negotiation and construction of regulatory and rhetorical distinctions that progressively reshaped understandings of what was (or was not) consistent with Chinese socialism.

A team of researchers headed by WU Assistant Professor Mia Raynard examined private sector development in China in a study entitled “Boundary work and transgressive institutional reform: Love, hate, and private enterprise in Chinese socialism.” The study examines economic reforms that unfolded between 1978 and 2007, as the Chinese government took steps to reintroduce the private sector. Based on a longitudinal analysis of political, legal, and historical documents, Mia Raynard and her team investigated how activities and people – once considered antithetical to Chinese socialism – came to be major driving forces in China’s economic development and growth.

A balancing act between socialism and the private sector

Institutions need to adapt to maintain their relevance and legitimacy – yet such adaptations may be precarious when they touch upon moral claims about what is right or wrong, good or evil. The work done to achieve such institutional reform in China was complex and challenging because it involved two potentially conflicting aims. On the one hand, the goal was to incorporate activities previously seen as antithetical to Chinese socialism. On the other hand, the government wanted to maintain the institution of socialism, characterized by qualities like collective ownership and self-sacrifice for communal interests. “It’s interesting how the Chinese government was able to overcome the ideological challenge of reintroducing the private sector without undermining its legitimacy and that of Chinese socialism. We find that this was effected, in part, through the construction of distinctions and narratives that reshaped understandings of what activities and people were or were not legitimately part of Chinese socialism,” says WU researcher Mia Raynard. What makes this kind of institutional reform both important and problematic is its moral dimension: it is not just seen as ineffective or inefficient, but morally wrong. We have seen the challenges of such reforms in the legalization of same-sex marriage and the introduction of commerce into the formerly sacred spheres of academic science and religion.