China wrestles with the rule of law

IN my last column, I raised some questions about Francis Fukuyama’s work and promised to return with the answers this month after speaking with the professor himself.

First, I asked, does the increasing number of very large industrial enterprises in China belie what Fukuyama wrote in one of his early books, Trust? There he likened the low-trust Chinese economy to that of southern Italy, where only shoes, belts, gloves and the like can be produced by small, family-run businesses. Lacking the levels of trust that typify small family businesses, neither China nor southern Italy could build the aerospace or automobile industries that would demand large numbers of unrelated employees. But since the publication of Trust in 1995, the Chinese have in fact created vast enterprises across a range of industries. How could this be so?