Creating Market Socialism: How Ordinary People Are Shaping Class and Status in China (review)

This book is about how people in China after market reform develop novel practices, as articulated in their narratives, to improve their social status, and how these practices become institutionalized over time to shape the formation of class and status in China. The author argues that the belief that using one of the four kinds of capital (political capital, economic capital, human capital, and social capital) is instrumental to achieving high social status is widespread during certain periods in China. Such a conviction guides people's social practices. In turn, as those practices are repeated systematically by large numbers of people, they become institutionalized. The institutionalized practices determine a person's standing or social status and, over time, set the basic rules for producing the hierarchy in Chinese society. The author concludes that political capital was the key to achieving high social status before 1978, the year the Chinese central government launched the market. However, the value of political capital has since faded and has been replaced by an emphasis on human capital.

This book has two parts. The first part, chapters 1 and 2, illuminates how institutionalized rules of attaining social status determine the social hierarchy in China, that is, how higher or lower statuses are formed. The second part explains how the practices of using four kinds of capital became institutionalized. The author draws much attention to using political capital before the Chinese market reform and the role of human capital in contemporary society.

The author interviewed eighty-two working adults to collect "narratives" in Harbin, an industrial city in northeast China, using participation observation and open-ended interviews. These narratives pertain to people's views and practices regarding how different forms of capital affect their job search and life strategies. As the author indicates, her reason for choosing this city was to avoid atypical cases represented by the booming coastal cities. However, many economic, cultural, and other differences exist in China's cities. It is hard to argue that the case of Harbin is representative of the rest of urban China.

The author's emphasis on the emerging importance of human capital in shaping China's contemporary social hierarchy may be overstated. The use of human capital is not the only institutionalized practice for achieving status in contemporary China. The use of social capital, as evident in gift exchanges and other reciprocities in the daily lives of people, has become a widespread and institutional means by which people bypass the onerous and often impenetrable official channels. Social capital can also determine a person's social standing, and at times it even works more efficiently than human capital. Thus, social capital should be considered in conjunction with human capital in contemporary China.

Hsu's book provides a new approach as it is based on ordinary people's social practices, which differs from many other studies that tend to dwell on political or economic elites exclusively. However, the reliance on the case of Harbin and the undue emphasis on human capital at the exclusion of social capital present some limitations to this novel study.