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The Politics of Advanced Capitalism

0 Comments 🕔22.Oct 2015

The Politics of Advanced Capitalism edited by Pablo Beramendi, Silja Häusermann, Herbert Kitschelt, and Hanspeter Kriesi, documents the results of a highly ambitious collaborative project by leading scholars in comparative political economy and welfare state research that aims to update the existing knowledge about the political economy of advanced capitalism with the realities of the post-industrial era. In this regard, the editors see the book as a direct continuation of similar major works in the field published in 1999 (Continuity and Change in Contemporary Capitalism) and 1984 (Order and Conflict in Contemporary Capitalism). Thus, the book’s agenda is not only to take stock of existing knowledge, but to set the agenda for future research in the field, maybe similar in ambition to Hall and Soskice’s 2001, Varieties of Capitalism.

To this purpose, the book starts out with a detailed introduction written jointly by the four editors. The theoretical ambition of this chapter is to develop a new theoretical framework that might be better able to explain the mixed pattern of continuity and change that can be observed in the politics and institutions of advanced capitalism. The core argument is the promotion of an “electoral turn” in political economy research (25). In this way, the authors distance themselves from recent scholarship by scholars such as Pierson, Hacker, or Thelen, who emphasize the role of organized interests or “producer groups” (i.e. trade unions and employers’ associations) in influencing policy output and socio-economic outcomes. Instead, Beramendi et al. argue that political parties not only continue to be important in advanced capitalism, but that in recent times, their role as central actors connecting the preferences of voters with the levers of policy-making has even increased. However, as is also argued in the introductory chapter, the power of political parties in policy-making is constrained by policy legacies, existing institutions, past ideological commitments, and various veto players.

The introduction purports to expand existing approaches in the study of partisan politics in advanced capitalism by devising a multi-dimensional theoretical framework. Starting with the micro-level of preferences and attitudes, it is argued that, in addition to the classical state-market dimension in political competition, a second dimension ranging from “universalism” to “particularism” needs to be added in order to fully understand the complexity of partisan competition. This second dimension relates to different issues such as cultural liberalism, support for globalization, post-materialism etc., and is related to preferences for investment-oriented vs. consumption-oriented policies. Universalism is associated with support for investment, whereas particularism tends to be linked with support for consumption oriented policies.

On the macro-level, the two dimensions in political preferences correspond to two dimensions that help to identify different institutional welfare state regimes: the investment-consumption dimension and the weak/strong state intervention dimensions. This helps to define four distinct welfare state regimes, which correspond rather closely to existing regimes: the equality regime combining strong state intervention with a high investment orientation (the Scandinavian countries), the status-oriented regime combining strong state intervention with consumption oriented policies (the Continental European countries), the competitiveness regime with strong investment and weak state intervention (the liberal countries), and “capture” regimes combining weak state intervention capacities with a strong consumption orientation (the Southern European countries). The innovation of the theoretical framework is to connect these institutional regimes on the macro-level with patterns of partisan competition and coalition-formation, which helps to explain why these regimes are politically stable and sustainable over time. As a consequence, a major finding/argument of the introduction and the volume as a whole is the rejection of the thesis of cross-national convergence and, instead, the re-affirmation of continued cross-national divergence of institutions, policies, and politics.

The introduction is followed by four sections: structural transformations, politics, policies, and outcomes. Contributions to the section on structural transformations include an overview chapter by Carles Boix on patterns of economic growth and development in advanced capitalism, which documents continued divergence across countries rather than full-scale convergence. The chapter by David Rueda, Erik Wibbels, and Melina Altamirano on the origins of dualism in labor markets posits that dualized labor market institutions nowadays are a consequence of protectionist policies of the past. Countries that promoted a strategy of internally oriented industrialization rather than export orientation in the past are now characterized by high levels of dualization. The contribution by Daniel Oesch carefully documents the changing class and occupational structure in labor markets and finds that in many European countries, the occupational structure between high-skilled and low-skilled occupations is less polarized than in the United States, where this trend is more pronounced. Rafaela Dancygier and Stefanie Walter study the impact of globalization and labor market risk on individual perceptions of migration and find that low-skilled individuals in general have a negative view of migration, whereas the attitudes of the high-skilled are more differentiated and depend on the “offshorability” of their particular jobs. Finally, the chapter by Gösta Esping-Andersen on changing family structures and gender relations argues that the revolution in women’s roles is not yet complete in many countries. This contributes to lower birth rates and higher divorce rates in the current period, but once a new family model based on gender egalitarianism is fully established, birth rates should rebound, and marriages should become more stable again.

The contribution in the politics section, in particular the chapter by Herbert Kitschelt and Philipp Rehm on changes in party alignments and the one by Silja Häusermann and Hanspeter Kriesi on individual-level preferences and party choice, continue along the lines of the introduction and supplement the theoretical framework with empirical data. Kitschelt and Rehm disagree with common analyses of the crisis of representative democracy by stating that parties are, for the most part, responsive and adapt to changing voter preferences and demands, i.e. they find support for party re-alignment rather then de-alignment or cartelization. Häusermann and Kriesi argue that the emergence of the second dimension in partisan competition has contributed to and is exemplified by the rise of new parties, in particular right-wing populist parties and green parties, with extreme positions on this second dimension. As a consequence, the major parties of the center left and right loose electoral clout, and patterns of partisan competition become more complex. These two chapters are complemented by a Anke Hassel’s contribution on the decline of trade unions, which provides a nice overview, including the most recent data on union membership and collective wage bargaining.

The section on policies starts with a chapter by Evelyne Huber and John D. Stephens on “postindustrial social policy,” which focuses on the political determinants of “consumption”-oriented social policies, i.e. the traditional pillars of the welfare state. The following chapter by Jane Gingrich and Ben Ansell expands this perspective by exploring the determinants of social investment policies. An interesting finding that emerges from both of these chapters is that partisan politics continues to be an important determinant of policy output. In the case of consumption policies, the classical left-right patterns with the left preferring more state intervention and the right preferring less seems to hold. In contrast, the direction of partisan effects depends on labor market structure and the progressivity of existing policies in the case of social investments because the redistributive implications of the latter are less clear-cut as these investments can cater to the wealthy or the poor depending on context.

The contribution by Gregory Jackson and Kathleen Thelen in this section is an important addition to the volume as a whole because it provides a contrasting perspective. Focusing on changes in industrial relations, it is argued that producer groups (i.e. organized labor market interests) are in fact more important than electoral politics. Furthermore, despite continued cross-national variation, there is a common trend of liberalization across different countries, contributing to the rise of new hybrid forms of capitalism combining elements of the traditional types of liberal and coordinated market economies.

The final section on outcomes starts with a chapter by Pablo Beramendi on the impact of consumption and social investment policies on economic outcomes. The core finding is that social investment policies are more effective in mitigating income equality, long-term unemployment, and the intergenerational transmission of inequality than consumption oriented policies. This is somewhat surprising, since as has been argued by Gingrich and Ansell, the redistributive implications of social investment policies are much less clear-cut than in the case of traditional social transfer programs. It follows an interesting chapter by Christopher Anderson and Jason Hecht on the linkage between decommodification and subjective well-being (i.e. “happiness”), which argues and shows that citizens in more generous welfare states and more liberalized labor markets are happier on average. The volume concludes with a summary chapter by the editors, which also contains some thoughts on the implications of the global economic and financial crisis.

In general, this volume is a very impressive collection of contributions by leading scholars in the field of comparative political economy and welfare state research. In this respect, it will certainly become a focal point for debates about the future of welfare capitalism in the Western Organisation for Economic Co-operation and Development (OECD) countries and beyond. The scope of the analysis is broad and multidisciplinary, connecting research in the mainstream of political science with scholarship in sociology and economics and broadening the analytical perspective from politics and policies to structural transformations and economic outcomes. The macro-structure of the book, divided into four sections as mentioned above, is very clear and convincing. Some of the chapters, in particular the contributions by the editors themselves as well as some of the others, are strongly connected to the theoretical framework outlined in the introduction. In other cases, the connection is rather loose, which affects the coherence of the volume as a whole.

As mentioned above, the volume is ambitious in devising a theoretical framework that aims at defining the agenda for future research in the field. On the one hand, this is both commendable and credible, since the volume brings together an impressive set of authors. On the other hand, given these ambitions, the outcome is somewhat disappointing. The central notion of “constrained partisanship,” i.e. the insight that partisan forces are constrained by policy legacies and institutional veto players, has been around for more than twenty years, at least since the work of Garrett, Swank and many others. The multi-dimensionality of partisan competition is an equally well-established finding in the literature, which the editors themselves have contributed to extensively. Finally, the claim of an “electoral turn” in political economy research is thought-provoking. In fact, it would be a movement back to the roots of political economy research in the 1970s and 1980s in the tradition of Hibbs and Cameron. From that perspective, much of the research in the 1980s and 1990s could be regarded as a detour, because it emphasized the importance of organized interests and institutions. To me, the real challenge in comparative political economy research is how to develop a theoretical framework that includes both electoral politics as well as organized interests, i.e. how their interact and jointly shape policy output and outcomes. Criticizing the “producer group” literature for its overly strong focus on organized interests, the editors run the risk of falling into the same trap by promoting the dominance of electoral politics over other forms of interest formation and aggregation.

Besides the role of elections and electoral politics, the second central claim of the volume is that of continued cross-national divergence. The volume starts with the thesis that “cross-national variation in institutional arrangements seems to have shifted from frozen landscapes to a complex, hybrid, and morphing configuration of elements taken from different places and ‘models’” (1). In the end, however, the theoretical framework devises a relatively traditional typology of four welfare state regimes with countries falling neatly into the country clusters as expected (see above). Furthermore, rather than being in constant flux, these regimes seem to be rather stable in the past as well as in the future; otherwise, the claim of continued cross-national divergence would be meaningless. The major innovation of the book in this respect is to devise a framework that systematically takes into account the role of social investments in addition to consumption oriented policies, which allows the development of a typology that is able to theorize the specific location of Southern European welfare states relative to other types.

In sum, this volume is certainly a must-read for scholars working in the fields of comparative political economy and welfare state research. Its core claims, which should be regarded as an extension and elaboration of existing approaches rather than something radically new, will certainly fuel debates and inspire future research on the further development of advanced capitalism.

Reviewed by Marius R. Busemeyer, University of Konstanz

The Politics of Advanced Capitalism
edited by Pablo Beramendi, Silja Häusermann, Herbert Kitschelt, and Hanspeter Kriesi
Cambridge University Press
Paperback / 471 pages / 2015
ISBN: 9781107492622

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