Critical political economy and the critique of comparative capitalisms scholarship on capitalist diversity

Introduction

The continued fall-out from the global crisis of the post-2007 period has led to a return of the concept of capitalism to public debate, triggering an ongoing discussion of the causes of the crisis, their connection with the underlying, ‘deeper’ dynamics of this mode of production, and the varied responses to the turmoil. From a critical political economy viewpoint, the need to acknowledge the general and systemic nature of the crisis, whilst also remaining aware of the considerable range of ways in which it has been and is playing out across different parts of the world, is absolutely central if one is to articulate a persuasive analysis and critique of capitalism in all of its forms.

The general observation that there is significant diversity within capitalism is an old one, but recently it has been most notably argued by – and thus has become associated with – the so-called comparative capitalisms (CC) literatures (for instance, see Whitley 1999; Hall & Soskice 2001; Amable 2003; Crouch 2005; Deeg & Jackson 2007; Estevez-Abe 2009; Streeck 2011; Schneider 2013). Contrary to what critical political economy perspectives would suggest, the common denominator across these contributions is the privileging of institutions over and above the wider social relations in which they sit and by which they are constituted. Thus, they see the basis for spatial and temporal differences to be rooted in institutional configurations, rather than in the contradictions, inequalities and conflicts that critical political economy considers to be central to capitalism.

In this sense, there has been a general lack of reflection in CC scholarship on the implications of the crisis for the frameworks being employed and the assumptions upon which they are based. Most analyses have – even if ‘capitalism’ and/or ‘crisis’ have once again become terminological reference points in parts of the literature – moved swiftly from the crisis itself to varied responses to the crisis (Bruff & Horn 2012). Therefore, the CC camp has mainly delivered discussions of the diverse institutional responses to challenges that are perceived as uniform and exogenous to the varieties in question, and thus are externalised from the analysis itself. Rather than targeting the underlying causes of the crisis, the debate has remained focused on the refining of institutionalist frameworks, as was the case prior to 2007. But even in terms of explaining different forms of crisis management, approaches such as the emblematic ‘varieties of capitalism’ (VoC) perspective have proven to be of limited utility (Weber & Schmitz 2011). Moreover, the overwhelming tendency in CC scholarship has been for the post-2007 period to be viewed as problematic for other approaches, especially those focused on the ‘virtues’ of free markets. In sum, the post-2007 crisis has had little impact on the trajectory of the institutionalist CC debates, which, some notable exceptions notwithstanding (see below for more), go on unperturbed.

The interpretation of the global crisis is but one of the areas of debate in which the dominant CC literatures are now reaching their own self-imposed limits. This would have been the case had there been no systemic crisis in the last several years, but the post-2007 period has thrown into even sharper relief the problems associated with the various brands of institutionalism that underpin CC scholarship. Yet this has been noted in specialist circles at best; hence the dominance of these perspectives in the wider social science discussions of capitalist variegation has been maintained. Indeed, in many circles they are viewed as the only ‘critical’ game in town: critical, that is, of the discredited ‘hyper-globalist’ theses which predicted a post-Cold War convergence of all institutional forms of capitalism towards one supposedly superior market-liberal Anglo-American model. In this respect, the study of capitalist diversity reflects the more general shifts in the social sciences over the past three decades, whereby radical scholarship which questions not only the necessity and/or desirability of certain variants of capitalism, but also analyses and critiques the contradictions, crisis tendencies and conflicts ingrained in the capitalist mode of production per se, has increasingly been pushed to the sidelines.

That being said, the critical political economy literature has – to some extent at least – helped contribute to its own marginalisation in the study of capitalist diversity. Lines of critical scholarship that focused on the historical evolution and the territorial–institutional differentiation of distinct forms of capitalism, including for instance the Marxist regulation approach (i.e. not the institutionalist versions – see Bieling in this special issue) and Third World dependency perspectives, were discontinued or at least lost considerable intellectual influence over the past three decades. Instead, the focus in more recent critical political economy scholarship has been mainly on ‘macro’ developments, often at the transnational level (for example, see Altvater & Mahnkopf 2007; Gill 2008; van der Pijl 1998). Although this work has been very important in its own right, for instance in developing a forceful critique of neoliberal globalisation and the role of powerful international institutions and agencies in this process, it has paid scant attention to the systematic variegation of capitalism on a world scale, with the above-mentioned result of leaving the weaknesses of the dominant CC literatures relatively insulated from critique. It has only been in recent years that some critical political economists have taken up the task of challenging institutionalist CC approaches on their traditional territory, engaging concretely with the question of localised institutions and how these social forms can be analysed – and therefore critiqued – in a more holistic and satisfactory manner (e.g. Bruff 2011; Jessop 2011).

This self-marginalisation has been exacerbated by the lack of dialogue across different linguistic and philosophical traditions, meaning that critical political economy scholarship has often been hamstrung by its inability to exchange ideas and knowledge across national boundaries. Britain and the German-speaking countries, where we are both currently working, are prime examples. The once intensive intellectual exchange – for instance, through the reception of the German state-derivation debates in the discussions of the British Conference of Socialist Economists in the 1970s (see Holloway & Picciotto 1978) or the continent-wide debates on regulation theory of the 1980s and 1990s (see Aglietta 1979; Jessop 1990; Demirović et al. 1992) – has significantly declined in both scope and depth over the last fifteen years or so. In good part, this is probably another expression of the general weakening of radical approaches. Still, it seems ironic given that similar issues have continued to be central: the uneven development of global capitalism in a time of ‘globalisation’, and the differentiated impact of such processes across a range of countries and regions. Contemporary examples include the thriving British debates on politico-economic geography and transnational capitalism (e.g. Peck 2010; Gough 2004) or the international historical sociology literature on uneven and combined development (Rosenberg 2005; Morton 2010), which have not yet been fully received in German-speaking academia. Conversely, German-language scholarship has, for instance, produced notable advances in materialist state theory which still have much to contribute to the international scene (e.g. Gallas et al. 2011; Demirović 2007).

Against this background, together with Christian May and Andreas Nölke of Goethe University Frankfurt, we initiated the project from which this special issue (as one of four major publications) stems. Entitled ‘Comparison, analysis, critique: Critical perspectives on the diversity of contemporary capitalism(s)’, ¹ the project pursues a series of interconnected aims which are implicit in the above discussion: to re-intensify the dialogue across different linguistic and philosophical critical social science traditions and make the respective approaches more internationally visible; to overcome the marginalisation of critical political economy scholarship in comparative research so as to develop critiques of capitalism which are more attuned to its differentiation than is presently the case; and, as an end result, to strengthen critical approaches in social science research and also in associated political debates. With this special issue, we hope to make a significant contribution towards achieving these aims.

Critiquing the dominant perspectives

In order to promote the multi-dimensional dialogue to which the project aspires, we, along with Christian May and Andreas Nölke, organised a two-day conference in Wiesbaden, Germany, in February 2012. This event was attended by researchers from a total of eight countries (Austria, Finland, Germany, Ireland, the Netherlands, Switzerland, the UK and the USA), rooted in a range of paradigmatic orientations (including critical institutionalism, regulation theory, materialist state theory, structural Marxism, feminist political economy, transnational historical materialism, dependency and world systems approaches, postcolonial studies, critical geography, uneven and combined development), disciplinary affiliations (sociology, political science, economics, business studies, geography, development studies, area studies), and representing a wide spread of junior and senior researchers. Contributors were asked to structure their papers around the aim of making a two-pronged intervention: first, to provide a critical introduction to CC research that would include a genealogy of its origins and development, an exploration of its theoretical and conceptual commitments, and a consideration of its wider political significance; and second, to engage critically with this field of research, and particularly with the presently dominant institutionalist approaches, from a series of alternative perspectives rooted in the broad and pluralistic field of critical political economy. Thus, we wanted to further the development of the intellectual basis for more productive and successful critical engagements with the genesis, nature and future of capitalist diversity, and also, crucially, the critique of capitalism in its manifold concrete instantiations.

From the papers presented and discussed at the Wiesbaden event, as well as some additional contributions, four publications have emerged, each with a distinctive scope, character and set of aims (especially with regard to existing gaps and omissions in German- and English-language scholarship). First, in 2013 a more introductory, edited German-language volume was published with Westfälisches Dampfboot (Bruff et al. 2013). Later in the same year, a special issue of the German-language journal Peripherie on ‘The world of capital’ (focusing on capitalist diversity outside the established centres of the world economy) appeared (Ebenau et al. 2013). Regarding English-language publications, an edited volume will soon be published with Palgrave Macmillan, which brings together and discusses several ‘new directions’ in critical CC research (Ebenau et al. 2014). This, then, brings us to the present publication.

The specific purpose of this special issue is to present a series of critiques of dominant perspectives in the CC field and also to outline a range of alternatives rooted in the critical political economy traditions. In the English-language debate, such a focus on critiques and alternatives is particularly warranted, because in contrast to the discussions in German there has been a more thorough and extensive engagement with capitalist diversity across a number of literatures and perspectives. The German-language political economy literature tends to split between a mainstream which unquestioningly accepts the popular but narrow VoC framework, and a small group of radical scholars who take their inspiration from earlier Marxist contributions but do not discuss the issue of capitalist diversity in any meaningful depth. ² In the English-language discussions, the debate around the VoC approach – which had almost monopolised the CC field for some years after the publication of its foundational volume (Hall & Soskice 2001) – has been both broader and more consequential.

In recent years, the questioning of the VoC approach’s perceived conceptual narrowness and excessive emphasis on institutional stability, by scholars working within the broader institutionalist paradigm, has condensed into the emergence of what Drahokoupil and Myant (2013) (in an earlier contribution to this project) have called a ‘post-VoC convergence’. This term refers to the fact that an increasing number of institutionalist CC scholars, while generally highlighting the merits of the VoC approach and its analytical premises and orientation, have come to consider the amendment of its narrow rationalist framework to be necessary as well as desirable. This has permitted a shift to more nuanced discussions of how many types of capitalism may exist, and how and in what ways such capitalisms may be changing (e.g. Becker 2009; Hay 2004). In addition, it has encouraged more sustained questioning of the ‘national container’ assumption inherent to VoC via contributions on sub-national and transnational dimensions to ‘national’ capitalisms, and greater attention has also been paid to structural inequalities both within and between different countries (e.g. Lane & Wood 2009; Myant & Drahokoupil 2012; Nölke 2011). Good reasons for deepening and renewing the critique of VoC remain, for its systems-theoretical outlook has spawned certain types of analyses that are replicated less successfully elsewhere in the CC literatures (in this special issue, see for example Wöhl, Weiss, and Coates’s second paper). But in more general terms, it is no longer viable – in German- and especially in English-language debates – to simply equate all dominant CC approaches with the VoC framework. To do so would entail an undue neglect of the advances in institutionalist scholarship over the last decade and a half.

Nevertheless, most of the scholars working in the ‘post-VoC’ line retain the focus on and the desire to further our understanding of institutions, i.e. what we see in the more obviously mainstream works of Hall and Soskice and others. Yet again, then, these contributions continue to bypass the existing alternative conceptualisations, such as those found in David Coates’s (2000) magisterial Models of Capitalism. As a consequence, and as outlined by a number of papers in this special issue (e.g. Coates’s first paper, Bruff & Hartmann, Gallas), even in the context of this more advanced discussion, radical approaches play no more than a marginal role in either German- or English-language CC debates. In both contexts, institutionalist perspectives have retained something of an interpretative monopoly over the wider issue of capitalist variegation and evolution.

This diagnosis may at first seem curious, in particular to those who have followed the work of Wolfgang Streeck, once one of the foremost mainstream CC scholars, in the past decade or so. On the surface, he has moved from a position which lauded the ability of certain types of institutional arrangements to create ‘beneficial constraints’ on capital in the name of more socially just and, to some extent, more economically efficient, versions of capitalism (Streeck 1997), to one that emphasises much more strongly the inherently limited nature of approaches which take institutions as the starting point for analysis (Streeck 2010). This has condensed, for instance, into the claim in a recent monograph that ‘the subject of this book is not institutions but capitalism’ (Streeck 2009: 3; emphasis in original). However, in the very next paragraph capitalism is simply declared to be ‘an institutionalized social order’ (2009; see also Streeck 2011).

This prepares the ground for his often interesting but self-limiting analysis of the German political economy since unification, which suggests ‘conceiving of the transition from organized to disorganized, or from nonliberal to liberalized, capitalism as one from Durkheimian to Williamsonian institutions, or as a process in which Durkheimian institutions gradually become more Williamsonian’ (2009: 154; original emphasis). By accepting the validity of views on institutions that are rooted in classical sociology and new institutional economics, even if he sees them as implying normatively different forms of capitalism, Streeck upholds institutions as the supposed fundamentals of capitalist order at the same time as he apparently criticises such an emphasis (for more on the flaws in Streeck’s recent work, see Bruff and Hartmann’s paper, and especially Coates’s first paper, in this special issue). The result is a continued hollow conceptualisation of social forms such as state institutions and firms. This means that, just as in the rationalist and firm-centric VoC framework, the very aspects of the social world that Streeck and other contributors to the ‘post-VoC’ literature proclaim to be their focus are left under-theorised and inadequately analysed. This seeming paradox is in fact an inevitable outcome of a worldview which by default abstracts from capitalism’s social basis.

In sum, even when considering scholars such as Streeck, we are still left with a literature which is characterised by well intentioned but ultimately reductive attempts to understand capitalist diversity, even though they now sometimes come in the seemingly more critical guise of an institutionalism which claims to have brought ‘capitalism back in’. In line with the general aims presented above, the contributions to this special issue set out to expose these weaknesses in greater detail, both on a theoretical and an empirical plane, and to develop alternative research perspectives on capitalist variegation which overcome such flaws by incorporating a fuller understanding of the capitalist mode of production.

Outlining the special issue

As implied earlier, the intellectual heritage of Capital & Class in debates on materialist state theory and capitalist diversity in the 1970s means that this is a privileged forum in which to present an important part of the outcomes of the ‘Comparison, analysis, critique’ project. Still today, Capital & Class’s position as an independent source for a Marxist critique of capitalism gives us reason to hope that the special issue will prove significant not only for discussions of capitalist diversity, but also for the broader debates on the future(s) of capitalism and the possible emergence of emancipatory alternatives to it.

As for the structure of the special issue, in the first section on ‘Critical political economy and the role of institutions’ we find the papers that are most strongly oriented towards fundamental questions. These contributions seek to tackle directly that which is both the biggest strength and also the most significant weakness of CC scholarship: its focus on institutions. As such, articles in this section provide the fullest and most detailed overviews of CC scholarship and also of how critical political economy can contribute to a more satisfactory analysis of the role of institutions in capitalism. By discussing Wolfgang Streeck’s recent work, David Coates takes on one of those parts of the ‘post-VoC’ literature that, as indicated above, have seemingly made the most radical departure from mainstream CC approaches. Nevertheless, he shows that even these contributions are still hamstrung by the assumptions shared across the institutionalist paradigm. He contrasts this with the rich heritage within Marxist approaches to the question of diversity within capitalism, arguing for the necessity of ‘going left and going deeper’ in order to understand capitalist dynamics, institutional variations and contradictions. Hans-Jürgen Bieling builds on this by exploring in greater depth the potential of two major bodies of critical political economy scholarship for aiding our understanding of capitalist diversity: regulation theory and neo-Gramscian international political economy (IPE). More specifically, Bieling argues that a Marxist regulationist framework, enriched by neo-Gramscian concepts, can provide a more adequate starting point for research into capitalist variegation.

This sets the stage for the next two papers in the section, which show how the analytical strategy adopted by the researcher has significant consequences for the implied understanding of capitalism and the conflicts which inhere to it. Bob Jessop discusses the improbability of continued capital accumulation as key to understanding how, even in apparently stable economic spaces, the crisis tendencies which are characteristic of capitalism will, at best, be displaced and/or deferred. With the notion of ‘variegated capitalism’, he introduces an alternative conceptualisation of capitalist diversity which he sees as shaped by the fundamental dynamics of the capitalist mode of production and spatially structured according to relations of ‘ecological dominance’. He illustrates these considerations with a brief analysis of the Eurozone crisis. This example is also utilised by John Kannankulam and Fabian Georgi in their article highlighting the utility of their historical materialist policy analysis (HMPA) framework. They explore how this approach, rooted in a critical political economy perspective on the capitalist state, can be complemented by some of the fine-grained empirical insights resulting from the CC focus on institutions. In line with their state-theoretical approach, they thereby reinterpret the core CC issues of institutional stability and change as products of the shifting relationships of social forces, rather than seemingly auto-generated institutional dynamics.

The following articles – one by Ian Bruff and Eva Hartmann, and the other by Stefanie Wöhl – focus on more specific issues related to the conceptualisation and analysis of institutions. The former article centres on the intellectual heritage of the CC literatures in neo-pluralist political science and economic sociology. Bruff and Hartmann show how both sources of inspiration are complicit in a redefinition of ‘capitalism’ as ‘the economy’, with the latter then often neglected in the substantive analysis. In consequence, capitalist diversity is equated with political or social diversity. Wöhl’s article takes a similar starting point in a different direction. The author challenges the dominant CC approaches, especially VoC, on gender, arguing that an alternative, gendered state-theoretical materialist framework is necessary for understanding the distinctive dimensions of capitalist domination for different subject positions. She illustrates these considerations with a critical analysis of current economic governance forms in the European Union.

Wöhl’s emphasis on neglected aspects of domination and hierarchy in capitalism leads us into the next section of the special issue, entitled ‘Diversity or dependence?’ The papers here address two key problems associated with CC scholarship: the difficulties it has in understanding regions of the world outside the core of the capitalist world economy; and the theoretical and political lessons which it does not learn as a consequence. Matthias Ebenau’s paper critically engages with another of the more progressive post-VoC incarnations of CC scholarship, namely the predominantly Brazilian ‘Varieties of Capitalism, Politics and Development’ research programme which is linked to Latin American neodevelopmentalist thought and policy. Drawing empirically on an analysis of the recent Argentinian politico-economic trajectory, he argues that this perspective suffers from misguided conceptualisations of the capitalist world economy and the nation-state, flaws which he finds to be deeply ingrained in its neo-institutionalist and neo-developmentalist fundamentals. Adam Fishwick, in turn, focuses on the ‘hierarchical market economy’ category that has been developed to incorporate the Latin American region into the empirical purview of the VoC perspective. He contends that this, like the VoC approach more generally, is flawed since it obscures the importance of global production networks and local working class struggles in co-constituting the capitalist ‘varieties’ in question. He uses an analysis of the historical development of the automobile industry in Argentina to substantiate his theoretical critique.

Fishwick’s emphasis on labour is built upon in the next two papers. First, Nick Taylor argues that CC frameworks neglect the diversity in forms of labour that exist both around the world and in combination in given spaces. To provide an explanation for the mutually dependent development of these labour forms, which include multiple variants of non-wage labour, Taylor invokes Trotsky’s writings on uneven and combined development, which have recently received increased attention in British international relations (IR) scholarship. The reference to Trotsky and the notion of uneven and combined development connects Taylor’s paper to Jane Hardy’s piece, even though the latter places ‘combined’ before ‘uneven’ in order to emphasise how capitalism as a global system is the source of the manifestation of contradictions in the form of diversity. Hardy utilises this to analyse the evolution of Central and Eastern European political economies since the late 1980s. Oliver Weiss, in turn, reconsiders the usefulness of yet another Marxist classic, namely the writings of Paul Baran, which foreshadowed Latin American dependency approaches. He criticises conventional CC contributions for their imprecise conceptualisations of capitalism and consequentially of capitalist diversity, the latter of which, he argues, needs to be redefined as the historically conditioned and socially contested utilisation of economic surplus. The last paper in this section is once again the work of David Coates. He highlights another aspect of the global hierarchical interconnectedness among different capitalist ‘varieties’ that is neglected by mainstream approaches, namely the centrality of imperialisms (past and present forms) for explaining the models found in the so-called advanced countries, in this case in the supposed ‘liberal market economy’ of the UK (and the USA). In his view, it is essential that we engage with Marxist theories on the global political economy in order to understand the significance of such structures.

Coates’s call provides the way into the final section on ‘Critique and strategy’. This contains a series of provocative essays, which seek to challenge not only the mainstream CC literatures but also some of the more strongly established ‘critical’ alternatives. In turn, this allows the authors to consider the political implications of their interventions for the Left. Firstly, Eva Hartmann critiques CC and some Marxist approaches for their views on competition within capitalism, returning to the classic work of Marx and Pashukanis in the process. She calls for a new research agenda based on this approach to competition, which can also inform social struggles that seek to exploit capital’s dependence on its living context for the realisation of value. Jamie Gough’s paper develops this theme further. It analyses local capitalism as a nexus of production, reproduction of people, and the state within a given locality. Within national capitalisms, he argues, there is an uneven and combined development among and across their different localised instantiations. This is something hardly ever appreciated by the methodologically nationalist CC approaches, but also (by implication) by Marxist contributions which focus on the ‘equalisation’ side of the coin. Gough uses this as the basis for highlighting the potential for local struggles by the oppressed. Strategy is central to Stefanie Hürtgen’s article as well, which at its core comprises a criticism of CC approaches for binding labour agency to national institutions and cultures. She shows that the widespread intellectual and political assumptions about ‘essential’ national cultures, habits and mentalities are profoundly damaging for any attempts to construct different types of transnational relationships which are emancipatory for labour.

The final two papers in this special issue take ostensibly ‘critical’ perspectives to task for their misreading of empirical developments via inadequate conceptualisations of capitalism and the place of the working class within it (in the process, embodying significant disagreement with each other). Alexander Gallas provides a detailed critique of three of the most significant authors in English-language CC scholarship for what he sees as their relatively superficial commitment to the study of capitalism as a structured whole. As a result, he finds their analyses of Thatcherism and the British state to be inadequate and also politically damaging. In contrast, David Bailey and Saori Shibata seek in their article to move beyond what they view as the tendency of orthodox critical political economy contributions to assume, even when sensitive to diversity across capitalism, that such diversity is characterised by domination, exploitation and little else. Calling upon the conceptual resources of the heterodox Marxist tradition, they develop a ‘varieties of contestation’ framework which seeks to reaffirm the primacy of labour in our study of capitalist diversity. They develop their arguments with reference to distinct patterns of contestation in Japan and the UK.

Conclusion

As can hopefully be seen, although the papers in this special issue share common ground to the extent that they express dissatisfaction with mainstream CC approaches, they offer a range of alternative perspectives that could be utilised instead. Therefore, there is significant potential for further collaboration and advances in our understanding of capitalist diversity. As such, we hope that any of the collections published under the project’s auspices – including, of course, this special issue – are of interest to readers and also help generate momentum towards a fuller engagement with the issue of capitalist diversity by critical political economy researchers. In particular, though, we hope that this special issue will help clarify debates in English-language literatures on the terms of engagement between more mainstream and more critical approaches; that is, the conceptualisation of capitalism offered by the researcher (either implicitly or explicitly), and the role of institutions that such a conceptualisation entails.

This is important for more than just academic debate: by abstracting from capitalism’s social basis, CC scholarship promotes a worldview which sanitises periods of crisis, assumes that economic development is a positive-sum game for all parts of society, seeks at best merely to ameliorate the profound inequalities that are characteristic of capitalism, contains an ingrained bias against labour (both as the source of wealth in capitalism and also as a social and political actor), upholds a formalist view of power which is by default gendered and racialised, and sees the move to a post-capitalist world as neither necessary nor desirable. Whether CC scholars agree with this assessment is largely beside the point; it is the logical conclusion of the institutionalism that is inherent to their work.

As noted in the introduction to this article, if one is to articulate a persuasive analysis and critique of capitalism in all of its forms then one must acknowledge the general and systemic nature of the post-2007 crisis. This is something that the CC literatures have failed to accomplish. Therefore, there is no better time than the present for critical political economists to rise to the challenge, both intellectually and politically.