Remodeling capitalism: A return to scale

Fred Block’s proposal, in both the book Capitalism: The Future of an Illusion and his accompanying article in this issue of Environment and Planning A, “Problems with the concept of capitalism in the social sciences,” should be taken for what it is, a beginning rather than an ending. His argument again shifts the scale at which we discuss variation within capitalisms and across territories. Block shifts the unit of the analysis and proposes a new language with which to do it. Drawing from the broad analytical traditions within social science, Block returns to the construction of the fundamental question: What factors determine the variations in how capitalism manifests in different places and the outcomes that variation produces? Those outcomes include variations in the performance of the economy, how power is distributed among owners in society, and levels of poverty, inequality, and the formation and deployment of development strategies.

Block argues that the common answer, property rules, is underspecified and insufficient. To address this explanatory failure, Block deconstructs both the independent and the dependent variables in his conceptual equation in a critique of approaches rooted in “property-based essentialism.” Block thus makes room for greater specification about the processes and actors deploying these dominant forms of capitalism and simultaneously stakes a claim about how greater variabilities provide more terrains upon which to contest capitalist hegemonies and the illusions they bring with them.

Block’s most compelling points include an argument about the dynamic nature of the variations in capitalism observed across territories. What factors produce variation in investment arrangements and power relationships between and within places? What accounts for patterns of convergence and divergence among places, between cities and regions? These are essential questions for economic geographers and lie at the core of our discipline. And so too does Block’s strategy for proposing an alternative explanation centered on scale. Even in the metaphors he employs to explain how to think about capitalism as a dynamic rather than a static state, Block turns to scale, including the building scale: “My alternative is to think of a market economy as similar to a building that is periodically remodeled for new uses and new circumstances” (Block, 2018: 28). That said, anyone who has been through a remodeling knows how difficult it is to leverage capacities and resources to achieve even a clearly visualized and articulated goal. It is, in many ways, all driven by the sequencing. That is to say, the order in which one performs the necessary tasks.

Block effectively argues that the scale of action—where the rules are made—has shifted back to the global and away from the variations produced by decisions made by nation-states. And Block further argues that just as it is insufficient to focus on property rules, to focus on firm strategies also produces an incomplete analysis (Christopherson, 1993). These firms are, after all, “local players in global games” (Kristensen and Zeitlin, 2005). And, of course, they really are. Transnational corporations, to no small extent, design the inflexible rules of the global game in which they so often win and they use scale as one tool to do so (Christopherson and Clark, 2007). However, as Block and others have noted, transnational corporations do not always advocate well for themselves, much less for other groups, and their failures typically create a damage pattern that extends beyond their own bottom line (Schoenberger, 1997). And thus, the argument for regulation and rules persists.

Block’s turn towards the global and away from a focus on firm strategies is also a shift in the unit of analysis. And as Block intends, this opens up a whole new discussion about the illusions produced by the capitalism narrative and the possibility of rewriting the codes that enshrine its inevitability in our global operating system. This discussion is worth taking forward and Block’s challenge to other scholars is to do just that. A dynamic capitalism that can be remodeled is subject to modification, and this implies that it might be tailored for local conditions even as the rules that frame the global game suffer from a lingering inertia.

Block’s proposal allows us to look beyond states and firms to other scales, for example, the household. Here we uncover a site of anxiety in the capitalist project that might give some hope to those who find contesting a global capitalist system head-on daunting. Redistributive authority—the ability to renegotiate levels of investments and the power wielded by the owners of capital—does not only lie within regulatory frameworks controlling the global game—it also sits within social and sub-national relations (Peck and Theodore, 2007).

Households, cities, and local governments all wield a degree of redistributive authority determining the levels and distribution of investments and the allocations of ownership power. And indeed, it is in the backlash to the highly localized resistance to the totalizing narrative about the capitalist illusion where one observes the growing anxiety within the capitalist project. The persistent efforts by governments to regulate the (particularly female) body bely a recognition of what renegotiation of investment decisions and power relations at the household level might mean to the stability of the capitalist project. Notable as well are the efforts by governments (state, provincial, national) to claw back authority allocated and even consciously devolved to local governments (cities in particular) to carve out territories that reflect different distributional choices and power relationships (Clark, 2018).

Block’s point is well taken: we must somehow become unstuck from the narrative that allows capitalism to cast this illusion of inevitability. It is time to jettison the theoretical baggage (Block, 2019). In the process, however, we might also consider that in embracing this challenge we think beyond the state and the firm and the formalities of global and national economic policy and political power to consider the local and the household scales which are increasingly sites of policy action—both from the bottom up and the top down.