Varieties of capitalism

State as the site of accumulation2. lecture

Teppo Eskelinen

The essence and varieties of capitalism

State protection to private ownership: variety in extent

Credit money: variety in level of protection of creditor interest (and rent-seeking activity)

Organisation of labour force: variety in state activity (schooling, childcare etc)

Varieties of capitalism (1)

Peter Hall: Liberal market economy vs co-ordinated

market economy Esping-Andersen: Liberal / conservative / social democratic

(corresponding with hegemony of liberalism, christian democracy, social democracy)

Gramsci: Hegemony

Varieties of capitalism (2)

Welfare: public / private (household) / private (investment) / work-related

Capital: conditioned / unconditioned Export-oriented / demand-oriented

Stages of capitalism (1)

Entrepreneur: Control of the whole process Division btw professional manager & owner

(birth of the CEO) The rise of the ”professional owners” =

institutional investors Portfolio investment → corporate engagement

Stages of capitalism (2)

Productive: Restricted finance, high investment in productive enterprises, low risk-taking, long-term purchasing power needed by key capitalists.

Financial: High risk-taking and collective risk-bearing, networks of finance gain power over taxation regimes, key capitalists willing to destabilise political systems.

The Keynesian welfare society (1): political form

Demand-led growth Capital controls International background: the Bretton Woods

system

Income policy, full employment Government-based social security

The Keynesian welfare society (2): emergence and crisis

Great depression in 1930s and subsequent WWII.

Caused by deflationary and contractionary economic policy

Reconstruction, willingness of governments to create global governance systems

Oil crisis, inflation, workers' strikes, banking interests

Postmodern identities, third world calls for political influence

Post-Keynesian theories

Key question: how to describe, what has emerged / is emerging after the Keynesian welfare society?

Schumpeterian workfare society Financial capitalism Authoritarian capitalism ”The immaterial economy” New forms of governance

Workfare society

Traditional welfare based on one's condition Workfare based on constant demonstration of

motivation – training, work experience etc (symbolic demonstration of attitude)

Predicated on constant competion between individuals

No orientation to full employment

Financialisation (1)

The proportion of finance in the economy increases rapidly

The role of debt in economy and politics increases

The logic of finance dictates political choices The logic of finance dictates production

choices ”Finance mostly finances finance”

Financialisation (2)

Welfare: savings and investment Individual dependence on success of finance Supranational financial networks, finance

centres

Emerging form of capitalism? (1)

”Asian capitalism”

Strong government control on labour, trade rules, public-private ventures, planning

Authoritarian regimes

Policies directed on attractring investment, cheap labour leads to excessive saving

Rapid commodification of subsistence forms of economy

Emerging form of capitalism (2)

Finance-led capitalism

Public sector spending, policy space and functions controlled by the market

Financialisation

”Central planning” firms, concentration of economic power

The immaterial economy and post-fordism

Increased commodification of culture, knowledge etc

Competing social logics: common vs commodity (fe scientific knowledge)

Cultural struggle by legal, but also coercive means

Meta-governance

From state governance to a new form of governance

The EU as an example

Based on the nation-state, yet somehow functioning above nation-state level

Struggle over the form of metagovernance: room for democracy or plain governance

Strengthening governance with strengthening financial networks also within nation-states, need for platforms for international co-ordination, yet no traditional international system

Politics in jurisdiction

Post-fordism: struggle over the definition of ”commodity”

Financialisation and financial claims: full payment of debts, tax havens, international legislation, tax evasion industry

Metagovernance: binding and non-binding agreements

Generally: the status of firms as holders of rights, ”quasi-persons”

To conclude

We can note typical features of capitalist mode of production, yet there are varieties

Varieties can be mapped historically (evolution of capitalism), politically (different models), or theoretically (limits to variations, possibilities of politics)

The big question: theoretical and political uncertainty and struggle over the form emerging after the Keynesian welfare-state

Eurocrisis etc: Return to Keynesianism?