The persistence of varieties of capitalism in rich democracies
My use of the term ‘varieties of capitalism’ does not put ‘capitalism’ in plural. I agree with the classic position1 – from Karl Marx, Max Weber and Werner Sombart to Karl Polanyi and Joseph Schumpeter – that capitalism in both its sociological and economic meaning is one system with the whole earth as its stage, as Schumpeter (1939, II: 666) once put it. Yet, it is also clear that capitalism does not exist without a state. The very fact that many states exist means that the economic and the political spheres are necessarily linked and form what I call the world political economy. My world market for protection and social order argument (see pp. 6-7 and 159-62) suggests that in this competitive setting political and economic entrepreneurs have to bargain to come to terms. Governments, which can be viewed as political businesses, produce ‘order’ and sell this public utility to capitalist enterprises as well as to citizens under their rule. By means of supplying this utility, governments affect the quality of their territory in the framework of the world political economy. This makes for the possibility that the whole set of institutional arrangements, be it at the level of the nation-states or unions of states (like the EU), differs. This is what the study of comparative capitalism is about. It cannot be the task of this introduction to overview these comparative studies of capitalism, but let me inform the reader that there are three main directions so far which the analysis of this quality of institutional sets took.