4 - Mao plus Deng

Summary

This chapter discusses how culture affects economic development. Based on historical, political, and economic reasons, China today has a strongly pro-economic growth culture. Historically, the Confucian culture of frugality, hard-working, and respecting the family is conducive to economic productivity. Politically, the authoritarian political system has shaped a population that is relatively more obedient and deferent to authority – traits that contribute to efficiency for low-skilled work such as manufactu¬ring. Economically, decades of poverty under Mao’s rule made people extremely motivated to work hard to make money. All these factors fueled China’s high economic growth. The chapter also draws attention to the fact that Mao had left an indelible imprint on today’s business leaders in China, a unique and important phenomenon that the international business community should be aware of. It also shows that a “Mao plus Deng” effect – Mao’s lawlessness and Deng’s call to get rich – is the root cause of property rights violations and especially the persistent problems of product safety and counterfeit goods in China.