The Impact of Regionalism and the Role of the G20
Edited by Jehoon Park, T. J. Pempel and Geng Xiao
Chapter 3: Asian Capitalism: Beijing Consensus as an Economic Development Model for the 21st Century
3. Asian capitalism: Beijing Consensus as an economic development model for the 21st century Edward K.Y. Chen1 3.1 INTRODUCTION: VARIETIES OF CAPITALISM Capitalism is characterized by the private ownership of the means of production, the production of commodities for sale, and the use of the market mechanism for allocating resources. Some (Weinberg, 2002) assert that the development of capitalism also depends on conditions such as: (1) institutional arrangements to ensure a dependable supply of labor; (2) a degree of social productivity sufficient to permit sustained investment; (3) commercial organization of the market whose scope is adequate to the productivity of the community; (4) a political process whereby economic power can become translated into government policy; and (5) a legal structure which is sufficient to protect private property. There is no pure capitalism in the real world; the type of capitalism depends of course on the degree of state ownership and the degree of state intervention in resources allocation. Furthermore, capitalism can be classified in accordance with the factors governing the behavior and strategy of firms. While earlier studies were on firm-based governance mechanisms to minimize transaction costs in shaping firm strategy (Williamson, 1985), the more recent literature puts emphasis on the importance of the institutional arrangements (such as capital and labor markets, environment, social welfare policies, industrial relations, interfirm relationships, state–business relationships) and the complementarities of these institutions in affecting firm strategy (Hall and Soskice, 2001).2 Different types of capitalism (varieties of capitalism) would then produce different ‘emblematic’...
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