In the recent debate concerning whether NGOs should become market-oriented, Mr. Yongguang Xu advocated unequivocally for the marketization of NGOs, while another young colleague also gave voice to his own concerns. It is a pity however that by the end of the debate neither party had really delved deep into the matter. The impetus for my writing this article is my belief that the question of whether NGOs should be market-oriented should be at the forefront of our discussions and receive attention in a more meaningful and serious way.
The first key point I would like to cover is the question, “What exactly is marketization (市场化)?” In the Chinese two-character word for “market” the first character, “shi” implies a transaction, while the second character, “chang” implies a physical market location or square. Therefore this compound, “shichang”, can be understood as a system of transactions. The term “transaction” implies a transfer and exchange of property rights. The term “market” does not necessarily mean a free market. The existence of free markets and non-free markets is not a matter of black or white, and instead refers to a spectrum (or say a degree of relationship) between the two extremes in the marketplace. In this sense “marketization” refers to the establishment of a system of transaction. Moreover, “marketization” ideally is oriented towards a market with a higher degree of freedom. As the process of marketization advances, aspects such as efficiency and competition will be the main driving forces of this transaction-based system.
With this being said, should NGOs become market-oriented? The answer to this question is extremely complex, and is explored in several dimensions in the discussion below.
First of all, in the vast majority of popular discussions NGOs are considered to be part of the domain of “civil society”. NGOs are connected to civil society in the same way government is connected to the country, and enterprises to the market. Here it should be emphasized that the concept of “civil society” is by no means inherently virtuous. Rather, it simply describes the presence of a field that may or may not have an objective existence.
On the one hand, during the progression of tremendous changes happening in the Soviet Union at the end of the Cold War the relationship between civil society and democracy began to be emphasized (of course discussion of the relationship between these two concepts did not begin in the Cold War, but rather earlier during the period of the French Revolution, when French thinker Alexis de Tocqueville emphasized the relationship and its impact on the development of the United States). The word “democracy” began to be viewed with a positive connotation, while in everyday conversation the term was seldom elaborated on, and its definition became more muddled.
On the other hand, not long after the term “civil society” had entered China, certain prominent social activists successfully reduced it to its lowest common denominator, and as such the term successfully gained an ideological connotation (as a result it also became more politically sensitive).
Secondly, at the time when the concept of civil society was first being proposed its purpose was to describe a kind of public action that lies outside of the government. At present we understand society as divided into three sectors: country, society, and the market. Therefore, civil society and the market exist in a parallel relationship. While the two may overlap in places, they can never completely replace one another. In this sense, NGOs and enterprises can also be related and have areas of overlap, but can never replace one another.
Thirdly, NGOs that tend towards the market exist not only in China, but around the world. However, opinions differ wildly on how to judge this tendency. Take the most obvious example of a market-oriented tendency, the United States. Supporters of the market-orientation believe that NGOs should optimize the sector by a constant consideration of efficiency and competition. Opponents believe in being watchful of and resisting a market-orientation, which they believe only serves to intensify the restrictions capitalism places on the sector. It is important to keep in mind that the extent of the market-orientation for NGOs differs greatly by country, and attitudes towards market-orientation also span the spectrum of support and opposition. Hastily put, in general American NGOs have a slightly more evident tendency towards market-orientation, and the voice of supporters is heard slightly more loudly (however, this voice does not overshadow that of the opposition, since the two sides are approximately equal). In contrast other countries tend to have a weaker tendency towards market-orientation in the civil sector, and opposition voices ring slightly stronger. Out of these, Britain stands as an interesting example. Originally British NGOs were much less market-oriented than those in the US, yet to some extent Britain is the birthplace of social enterprise. In 2004/2005 individuals such as Chris Jones and Iain Ferguson issued a declaration entitled “Social Work and Social Justice”, reflecting on a variety of problems in British social work. Later these reflections moved beyond solely the field of social work, and became more widely accepted among NGOs. Therefore criticisms of the market-orientation within civil society have grown in the past years, almost to the point of reaching a consensus.
Fourthly, if the tendency toward market-orientation is conducive to the development of NGOs, why have we not reached a consensus on the issue, but rather created widespread blocks on market-orientation, and made it the subject of widespread suspicion and even criticism? This is due to the innate differences between the logic of civil society and the logic of the market. The market aims to maximize profit, while civil society aims for social justice. Likewise, these differing aims correlate to an innate difference in the logic of the work of enterprises and NGOs. Enterprises operate under the logic of efficiency, to achieve maximum benefits with minimum costs and risk. In contrast, NGOs operate under the logic of empowerment, aiming to facilitate their participants’ level of self-awareness and self-sufficiency, and to improve their present state of being. Although these distinctions between the goals of civil society and the market sometimes may overlap, they more often serve to contradict one another. It is difficult to imagine a possible integration between the logic of efficiency and that of empowerment. The reason for this is simple; efficiency depends upon specialization and the division of labor, which in itself is a procedure of discipline NGOs through “disempowerment”, precisely what NGOs exist to reflect upon and oppose.
In that case, returning to the Chinese context, do Chinese NGOs need to become market-oriented?
To answer this question, one must first understand the context in which market-orientation was first proposed for NGOs. Firstly, it must be understood that the NGO sector in China is very strange, with a great number of “government-led non-governmental organizations” (GONGOs). Thirty years after the reform and opening up of China (since early 1980s) the NGO sector remains largely unchanged and closed. This means that GONGOs occupy an unreasonably dominant position with a profusion of internal corruption, leaving citizens in a difficult position, relatively powerless to take steps forward. As I understand, these are the problems Mr. Yongguang Xu wished to solve with his proposal for market-orientation in the sector. Secondly, one must understand that the past thirty years of reform and opening up have created a successful and victorious narrative, with the advent of a market economy actually facilitating a process of awakening and re-energization of civil society. These two processes occurred simultaneously, and are connected both through similarities and differences. However, the narrative of the victory of the market economy has overshadowed the narrative of a reawakened civil society, causing marketization to be widely considered as an effective (or indeed even the only) means to an end. There are few countries that resemble the Chinese case of having transitioned from a non-market based economy to a market-based economy, and likewise possess a large number of both economic fundamentalists and die-hard economic liberals. This is the inevitable result of the victorious narrative of the past thirty years of reform and opening up. As I understand it, this is possibly the foundation and justification for Mr. Yongguang Xu’s advocacy of “Marketization for the Public Good” (公益市场化).
However, if we return to the problems mentioned above it is not difficult to realize that “Marketization” in itself does not necessarily achieve the end of the “administrative-orientation” (in the words of Yongguang Xu, 去行政化). Another young colleague involved in this conversation wrote an article which discusses the problem of countries disciplining NGOs through the means of the market, and which emphasized “Market Leninism” (市场列宁主义) as a framework to analyze Chinese NGOs. Unfortunately this did not lead to detailed discussion or gain the attention of many.The framework of “Market Leninism” originates from Mr. Xueqin Zhu’s text “Reform and Opening: Lessons Learned” [1]. The text describes the drawbacks and pitfalls after the reforms of Deng Xiaoping’s Southern Tour [2]; the combination of a political system which had not yet changed with a capitalist economic system, and the resulting alliance of power and capital in the country. These drawbacks and pitfalls exist not only in the market, but also in the NGO sector. One need only take a hard look at the last few years of the boom in “government purchase of services” to realize these purchases are undoubtedly an important step in the process of marketization. Far from promoting the development of NGOs (and without even mentioning the topic of false prosperity of NGOs sector), this has bred a variety of problems, including problems that even fundamentally threaten the healthy ecology of NGOs.
Moreover, NGOs many times can and should be challengers, or at least doubters, of the market, a point that is particularly important in today’s China. Today’s China is facing many serious problems. Labor rights in particular are a sharp issue. NGOs seem a promising means of addressing and fixing these problems. However, if the NGO sector continues to emphasize market-oriented policies and aims for “efficiency”, perhaps no progress will be made on the labor issue. By this same token, the past thirty years have brought tremendous changes when it comes to views on gender and intimate relationships. Due to these changes, feminism has arisen both as an inevitable moral call and as a societal requirement. Feminism itself possesses a very clear and enlightening criticism of language such as “market”, “efficiency”, and “allocation of resources”. Space limits my ability to expand upon this topic further, but I simply want to say that organizations working in this sector perhaps need not and will not accept the call for “marketization”.
It is true that “traditional” NGOs that simply provide charity are constantly receiving criticism (and even Mr. Yongguang Xu himself does not approve of this) and desperately need to update their work ethics and methods. On the other hand, it is precisely those NGOs themselves that see no need to orient themselves toward the market, because as soon as marketization occurs, the organization either can or will need to outsource (to improve efficiency). However, many of the leaders and benefactors of traditional charity organizations enjoy the process of administering donations. Marketization would deprive them of this pleasure, and therefore would be unpalatable.
“Value” in the market sector and “value” in Civil Society have completely different meanings. The former kind of value is very simplistic, while the latter is diverse and in some ways the opposite. This diversity is precisely the important reason why many people have been attracted to switch job from business to civil society sector. “Marketization” removes the diversity of this value, which might let some people derive profit and advantage from this (in fact, some people already are benefiting in this way), but if we were really to calculate the cost and benefits – this is precisely what is most important in the market after all- we would find that the losses from this process outweigh the gains. Of course, in today’s China, NGOs are free to try and operate in any number of methods. However, if the civil society sector as a whole turns towards marketization, the day of its demise will not be far ahead.
[1] Zhu Xueqin（朱学勤） is a professor at Institute of History of Shanghai University.
[2] In 1992, Deng Xiaoping’s Southern Tour re-prompted China’s move for socialist market economy.
