Models of capitalism
Capitalism models is a collective term for the ideal and real types of forms of capitalist economic systems constructed and discussed in the social , political and economic sciences , especially in the sub-disciplines of comparative political economy and comparative industrial relations research . In the Anglo-Saxon discussion, the term " Varieties of Capitalism " has become established for this. The increased competition between economies in the course of globalization has sparked a strong interest in comparative efficiency analyzes of the socio-economic systems of nation states or geo-regions. The defined models form the basis of theoretical and empirical studies. The meaningfulness of the approach is controversial because of the reduction of complex economic and social systems to a few variables, the strong variance of different types of companies within a nation state and the international interdependence of national economies.
introduction
The focus is on the comparison of institutions of economic management and industrial relations . Researchers have been working in this area for a long time with the “Anglo-Saxon” versus the “statist”, “Scandinavian” or “ Swedish ” model and the “German model” (see social market economy , Rhenish capitalism ). The comparison of the institutions is mostly based on the questions of efficiency in relation to economic performance and the development tendency (convergence or divergence).
A historically significant event for comparative research on capitalism was the collapse of the state socialist systems: after the system comparison ceased to exist, the internal competition between Western forms of capitalism received increased attention. So far the comparison has mainly extended to the forms of western and Japanese capitalism, the comparison with other Asian forms (China, Korea, Singapore) is still in its infancy.
Andrew Shonfield ("Modern Capitalism", 1965) can be regarded as the forerunner of this field of research. He compares the planning instruments and market ideologies in the capitalist systems of the USA, Great Britain, Germany, France and Sweden as well as - cursory - Italy, Austria and the Netherlands.
This research direction received decisive impulses from Michel Albert ("Capitalisme contre Capitalisme", 1991, German: Capitalism contra Capitalism ). He compares the capitalism model that exists mainly in Germany, the Alpine countries and the Netherlands, for which he coined the term “ Rhenish capitalism ”, with the “neo-American” model on ten levels of comparison (including taxation and finance, banks and stock exchanges, Wage and salary hierarchy, social role of the company).
A dense description of four variants of capitalism - Swedish, US, Japanese and German capitalism - can be found in the treatise “Capitalism” (2004, German 2007) by the British sociologist James Fulcher. Although all four models have come under pressure since the 1970s to "abandon their practice of managed capitalism and implement reforms that allowed market forces more freedom," he said, national differences persist.
Peter A. Hall and David Soskice (“ Varieties of Capitalism ”, 2001) presented the most thorough tableau of capitalism variants to date . They form two ideal types - “liberal market economies” and “coordinated market economies” and compare these on the basis of five institutional clusters (industrial relations, vocational education and training, corporate governance, inter-company relations, workforce) that companies use as support systems for their serve internal and external coordination problems. While companies in liberal market economies regulate their activities mainly through market relationships and hierarchies, companies in coordinated economies rely on additional institutions and organizations.
The model of cooperative capitalism is mainly used in the social sciences and emphasizes special characteristics of Rhenish capitalism according to Albert or the coordinated market economy according to Hall and Soskice. In cooperative capitalism, interlocking institutions promote understanding on an overarching logic of market regulation. This means in particular banks as lenders of companies and owners of company investments, capital links between companies, personal links through supervisory board mandates and employee participation. Agreeing on long-term goals and steady growth favors the interests of the stakeholders in contrast to focusing on the shareholder value of financial capitalism. A long-term consensus is seen as a prerequisite for the emergence of complex products in economies, since this requires investment in training, research and development that is incompatible with a short-term interest in return on equity.
Definition of the models of capitalism
Rhenish capitalism, neo-American capitalism
| Models of capitalism after Michel Albert | ||
|---|---|---|
| Differentiator | Rhenish capitalism | neo-american capitalism |
| predominant corporate finance | Banks | Stock exchange |
| predominant alignment of interests | long-term corporate development | short term return |
| Stakeholder interests | Shareholder value | |
| Relationship networks | long-term, institutionalized | short-term, project-related |
| Participations, supervisory board mandates | ||
| View of the company | The center of life of people | tradable goods |
| Public service obligation | sole task of profits | |
| social security systems | greatly expanded | little developed |
| labour market | heavily regulated | flexible |
| Labor relations | Corporatism | Lobbying |
| Co-determination | no participation | |
| Power of the unions | tends to be medium to strong | tends to be weak |
| Role of the state | active | reluctant |
| Interventions, subsidies, regulations | minimal regulations | |
| Training of skilled workers | dual state / company | no classic skilled worker training |
| Further training of specialists | medium business interest | hardly any interest from companies |
| predominant career opportunity | according to length of service | when changing company |
| Sources: Michel Albert Capitalism versus Capitalism , Chart Political Economy, University of Braunschweig | ||
See also main article Rhenish Capitalism .
Coordinated economy, liberal economy
| Models of capitalism after Peter Hall and David Soskice | ||
|---|---|---|
| Differentiator | Coordinated market economy | Liberal market economy |
| CME coordinated market economies | LME liberal market economies | |
| 1. prevailing funding | Banks, holdings | Stock exchange |
| depending on | Relationships, trust, inside knowledge | public information |
| 2. Education and training | dual system, monitored by employee associations | off-site |
| Industry and company-specific training | more general education | |
| 3. internal decision-making structure | Consensus management, shareholders, employees, | Decision-making authority of management, |
| House bank, important customers, etc. Suppliers | strong influence of shareholders | |
| 4. Cooperation between companies | institutionally funded | project-related contracts |
| Standard setting | through consensus in associations or institutions | negotiated between companies, prevailed on the market |
| Technology transfer | institutionally and systemically funded | negotiated between companies |
| 5. Employees | Employers' associations negotiate collective agreements | individual contract negotiation |
| labour market | strongly regulated | deregulated |
| Co-determination | Yes | no |
| systemic advantages | well-trained, cooperating workers | Mobility and easier re-qualification of employees |
| Sources: Masahisa Endo Memo on Hall and Soskice ; Peter A. Hall, David W. Soskice: Varieties of capitalism | ||
The model regards companies as the central actors in a market and depicts the differences between economies that are considered essential as relationships between companies and other market actors in the respective economy. In an LME, for example, a company can freely agree wages with an employee, in a CME this takes place in collective bargaining between employers' associations and trade unions. The consensus reached applies to all competitors in the national market and thus has an overarching synchronizing effect, but there is no competition on this point. Associations are, for example, institutionalized consensus-finding bodies which, on the other hand, limit the freedom of management to make decisions. In LMEs, trade in goods and services takes place in a highly competitive environment with freedom of contract, companies make their decisions in hierarchies and conclude contracts with each other. In CMEs, companies depend heavily on relationships outside of the competitive market. Your objective is not only based on market supply and demand, but often also of a strategic nature.
The coordinated economies are further differentiated by some economists such as Herbert Kitschelt into NCMEs (nationally coordinated economies) and SCMEs (sectorally coordinated economies). Denmark is one of the nationally coordinated economies, Germany, with sector-specific institutions and regional characteristics, is one of the sectorally coordinated economies.
The Three Worlds of Welfare Capitalism
The fundamental book The Three Worlds of Welfare Capitalism by Gøsta Esping-Andersen typifies capitalist systems according to the principle of the welfare regime.
liberal
With this type, the market logic dominates. Welfare state benefits are low and linked to means tests. The US is of this type that meets liberal market economies.
conservative
With this type, benefits such as pensions or unemployment benefits are linked to work and previous social security contributions. Conservative is to be understood in the sense of "conserving the standard of living". Germany belongs to this type, which is usually associated with sector-coordinated economies.
social democratic
In this type of work, the character of work as a tradable commodity is largely reduced and compensated for by state-guaranteed wage replacement benefits. This is also known as the universal welfare state. Sweden is of this type. The model of a nationally coordinated economy mostly coincides with this welfare state model.
Criticism of the defined models of capitalism
Criticism of the research approach of the VOC
The research approach of the VOC ( variety of capitalism school ) is particularly criticized by representatives of regulation theory (RT) like Robert Boyer . In the opinion of RT representatives, the models make no sense because they reduce social diversity too much. In particular, no market can do without a regulator outside the market. In this sense, the postulated LMEs ( liberal market economies ) are also coordinated market economies that are just coordinated differently. Concepts of a “best capitalism” and lasting stability are doubted by the RT. The research approach of RT, which is based on long-term empirical studies, proposes the end of every method of regulation through an endogenous structural crisis. The doctrine of the diversity of national capitalisms emphasized the governance of the private sector; the systemic approach of the RT, in particular the consideration of macroeconomic coherence, is superior.
The regulation method valid in a society is historically, culturally and determined by power relations. The RT theory distinguishes four types of capitalism according to the form of regulation: market-led, mesocorporatist, social-democratic and state-controlled capitalism. (By mesocorporatist the model of Japan is meant, in which the regulation is negotiated between the state and corporations according to the analysis of the RT.) Further variants are emerging in the former communist countries and in the Asian countries.
In economies that see their growth opportunities, for example, in the cheap mass production of goods or in high-tech products, in the opinion of the RT, complementary institutional variants of capitalism develop evolutionarily, which on the other hand also represent a specific competitive advantage of the respective economy.
Criticism of the model of Rhenish capitalism
If Rhenish capitalism is understood in a generalized way to mean the coordinated market economies that emerged in many Western European countries after the Second World War, the term has been incorporated into the research approach of the VOC and the aforementioned criticism applies. In this sense, too, the term is not undisputed:
“In the literature on industrial relations, the German model is often used as a paradigm for cross-border similarities. B. Models such as 'Rhenish capitalism' (Michel Albert) can be constructed. We save ourselves from going into these models here. It is certainly correct that the German system of industrial relations shows particularly large differences to Anglo-Saxon, Japanese and Eastern European systems and, viewed in this way, greater similarities, e.g. B. exist with Denmark, Belgium, France and Italy. On closer inspection, however, many of these similarities quickly disappear; ... "
In the narrow version of Albert's term with a strong focus on the real economic and social system in Germany at the beginning of the 1990s, it is also objected that it is a "fleeting" object of investigation. Reforms such as the opening of the capital markets and the unbundling of German industry have led to a reality in which numerous companies are guided by the rules of financial capitalism. Furthermore, information technology, global production chains and the transformation of the industrial society into a service society have brought about changes that are inadequately captured by the model of Rhenish capitalism postulated in 1991 .
theses
Capitalism versus capitalism
In 1991, Michel Albert put forward the theses that the model he described as Rhenish capitalism was more efficient and fairer than Anglo-American capitalism, but that the latter would prevail because it appears more attractive and has advantages for influential social classes.
The Happy Variety of Capitalism
Deutsche Bank Research carried out a study on the satisfaction of people in the respective capitalist system. The study was updated in 2016 by the Center for Social Progress e. V. published. 16 indicators are examined.
The group "happy capitalism model" includes Denmark, Sweden, Norway, Finland, the Netherlands, Switzerland, Germany and New Zealand.
The “Anglo-Saxon model of capitalism” group includes Australia, Canada, the United Kingdom, the United States of America and Ireland. Most of the examined indicators of this group correspond to the results of the countries of the "happy capitalism model" but not all.
The group “less fortunate model of capitalism” includes Belgium, France and Austria.
The “East Asian Model of Capitalism” group includes Japan and South Korea.
The group “Southern European Model of Capitalism” includes Portugal, Spain and Italy.
The group “Eastern European Model of Capitalism” includes Hungary, Poland, the Czech Republic and Greece.
Radical and Incremental Innovations
Hall and Soskice argue that in LMEs market-driven, radical innovations with entirely new products and the emergence of new industries are favored. In CMEs, the incremental further development of existing technologies is favored because of the long-term investments in technologies and competence of the employees and long-term relationships in research, development and employment relationships. The diversification of high quality products and the search for new fields of application for technologies are a characteristic of CMEs. This innovation tends to be technology and supply-driven.
Optimization thesis
“In the short term, wealthy OECD democracies differ in institutional varieties of capitalism and worlds of welfare state . Each of the main variants specializes in mastering two of three horns of a "trilemma" of democratic economic and social policy, but at the price of leaving behind a third, secularly worsening residual problem (Iversen / Wren 1999). "
Depending on the orientation
- Liberal economies favor full employment and fiscal equilibrium, but result in social inequality
- nationally coordinated market economies favor full employment and social justice, but create fiscal problems
- Sectorally coordinated market economies tend towards fiscal equilibrium with moderate social inequality, but accept permanent exclusion of the low-skilled from the labor market
Quote
“The competition is about who can make the best products. Who is the fastest to improve their standard of living? Who has the best trained and most experienced workers in the world? Who is the leading investor in manufacturing, research and development, and infrastructure? Who is the best organizer? Whose institutions (government, education, business) are the most efficient in the world? To be forced by your economic rivals to ask yourself all these questions is a good thing, not a bad thing. "
Basic literature
- Andrew Shonfield: Modern Capitalism. The Changing Balance of Public and Private Power . Oxford University Press, Oxford 1965.
- Michel Albert : Capitalism versus Capitalism . Frankfurt am Main: Campus, 1992. ISBN 3-593-34703-2 .
- Peter A. Hall / David W. Soskice : Varieties of capitalism: the institutional foundations of comparative advantage . Oxford: Oxford University Press, 2001. ISBN 0-19-924775-7 .
Further literature
- Werner Abelshauser : Kulturkampf: The German way into the new economy and the American challenge. Kulturverlag Kadmos, Berlin 2003, ISBN 3-931659-51-8 .
- David Coates: Models of Capitalism. Growth and Stagnation in the Modern Era . Polity Press, Cambridge 2000. ISBN 0-7456-2058-2 .
- Ronald Dore: Stock Market Capitalism, Welfare Capitalism: Japan and Germany versus the Anglo-Saxons . Oxford University Press, Oxford 2000.
- Gøsta Esping-Andersen : The Three Worlds of Welfare Capitalism . Princeton University Press, Princeton 1990. ISBN 978-0-691-02857-6
- James Fulcher: Capitalism . Reclam, Stuttgart 2007. ISBN 978-3-15-018397-7 .
- Max Miller (Ed.): Worlds of Capitalism. Institutional alternatives in the globalized economy . Campus, Frankfurt am Main 2005. ISBN 3-593-37597-4 .
- Martin Schröder: Variants of Capitalism. The differences between liberal and coordinated market economies . Springer VS, Wiesbaden 2014. ISBN 3-658-05241-4 .
- Michael Spangenberger (Hrsg.): Rhenish capitalism and its sources in the Catholic social teaching . Aschendorff, Münster 2011. ISBN 978-3-402-12874-9
Remarks
- ↑ Neo-American Albert refers to Reagan's "conservative revolution in economic policy" with the tendency towards the " minimal state ". Cf. Michel Albert: Capitalism contra capitalism . Frankfurt am Main: Campus, 1992, p. 9
- ↑ James Fulcher: Capitalism . Reclam, Stuttgart 2007, chap. 4: "Is capitalism the same everywhere?"
- ↑ James Fulcher: Capitalism . Reclam, Stuttgart 2007, p. 121.
- ↑ See e.g. B. Ulrich Brinkmann / Karoline Krenn / Sebastian Schief (eds.): Endgame of cooperative capitalism? Institutional change under the conditions of the market-centered paradigm , p. 266, VS Verlag, Wiesbaden 2006, ISBN 978-3-531-15325-4
- ↑ Arthur Benz, Susanne Lütz, Uwe Schimank and Georg Simonis (eds.) Handbuch Governance . VS Verlag, 2007, ISBN 978-3-531-14748-2
- ^ Rober Boyer How and Why Capitalisms differ . Max Planck Institute for the Study of Societies , Cologne, MPIFG discussion paper (June 2005), ISSN 0944-2073
- ↑ Petra Frerichs u. a. Future of the trade unions , Working Paper 44 of the Hans Böckler Foundation , p. 119
- ^ Albert, Michel: Capitalism contra capitalism. Frankfurt am Main: Campus, 1992. ISBN 3-593-34703-2
- ^ Stefan Bergheim: The happy variety of capitalism 2.0. (PDF) Center for Social Progress e. V., August 2016, accessed on August 23, 2018 (English).
- ↑ Lester C. Thurow, In: Head to Head. Who will win the economic war between Europe, Japan and the USA? , ECON-Verlag, 1993, p. 23, ISBN 3-430-19081-9