The Link Between Confucianism And Economic Growth Essay

The Link Between Confucianism And Economic Growth Essay

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Positive School While a number of explanations focused on East Asia’s historical context, government intervention strategies, or changes to global manufacturing practices (Lin, 2012). Wiarda (2013) states that in nearly every discussion the debate is centered on two factors- institutions and culture. That is, between market economic development or technological innovation and “getting prices right”, and the Asian Values thesis that emphasises the link between Confucianism and economic growth.
The latter or the ‘positive school’ follows recent attempts to revive Confucianism and argues that Confucian principles such as education, filial piety, hard work, and strong authority are the primary reasons for Asia’s impressive growth (Macfarquhar, 1980; Hofstede & Bond, 1988; Tu, 1996).
To demonstrate the connection between Confucianism and economics, scholars such as Chen Huan-Chang (2015) set out a historical analysis on Confucian scriptures and show that all Confucian principles can be interpreted through economics. So, for example, following the Confucian principle of tien meaning ‘nature’ or ‘Heaven’ Chen states that human beings are subject to natural selection. “When the good principle does not prevail over the world, men of small power are submissive to those of great” (p. 171). Applying Chen’s analysis, Peng (2006) states that to prevent uncontrolled competition (or Laissez-faire policies) from leading to inequality, government intervention in East Asia could in that case be interpreted as a Confucian way of using state regulation to control distribution.
On the whole, the conclusion follows that Confucianism can be understood as developing a system of life that administrates wealth according to principles of justice, and impr...

... middle of paper ...

...a theoretical perspective Richter (2002) and Lam (2003) describe how in a Confucian system, the individual is placed into a setting of human relationships (guanxi) and must exist by knowing how to interact with people of different statuses. The rectification of names and the five cardinal relationships provides guidance and moral justification for hierarchy and reciprocity, while conduct within these relationships leads to order (Story, 2003).
Using the example of Korea’s chaebol companies which are based on the Confucian idea of self-discipline and loyalty to superiors, Hartfield (1989) also takes a moderate approach by stating that without attributing Confucianism as a monocausal explanation for economic growth, Confucian ideas of loyalty, trust, and compassion bind people together and could create incentives for economic activity in ruthless market competition.

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