The Competition between Confucianism and Capitalism

Since Max Weber, Confucianism has been widely viewed as being in opposition to capitalist or modern growth in historical China, especially in comparison with the rise of Western Europe after the Protestant Reformation. In pre-19th century China, the absence of industrialization or capitalism is partially attributed to the conservative nature of Confucian culture, particularly the emphasis on the ‘adjustment’ to the world and the depreciation of pursuing wealth, among others. And perhaps more importantly, the clan as a tangible organization of Confucianism restricted interpersonal cooperation to the family or lineage scope. Such ‘kinship-based morality’, in contrast to the ‘generalised morality’ enforced by market institutions in the West, paved the way for China’s divergent developmental path from the West. In a recent study, Zhiwu Chen, Andrew Sinclair and Chicheng Ma find another channel through which Confucianism inhibits capitalism: competition in financial markets.