ABSTRACT
This chapter outlines the global changes and national specificities of European capitalism since the 1970s. It focuses on the relationship between firms and the national financial system, the role of the state and the fragmentation of the labour market. The varieties of capitalism approach suggest that different national systems have their own logic. Within each system firms act with situational rationality, so that a strategy that will produce profits in one variety of capitalism could be a disaster in another. The varieties of capitalism approach have spawned a rich research literature. It has highlighted the extent to which within contemporary Europe ‘Anglo-American’, ‘Atlanticist’ or ‘Liberal Market Economies’ are not the norm. Within the political economy tradition the contemporary form of capitalism is often characterised in terms of financialisation. In the 1990s European economies were often seen as ‘scelerotic’ because of their low levels of employment, but everywhere now employment has increased, but in different ways in different societies.
