In the Market But Not of It: Fair Trade Coffee and Forest Stewardship Council Certification as Market-Based Social Change

This article proposes an institutional analysis of modern capitalist economies. It argues that the institutional dimension is crucial if one wants to account for the coexistence of different types of modern developed economies, characterized by substantially different institutional structures. It explains why no generalized pattern of convergence towards the same economic model should be expected, in spite of 'globalization'. An institutional analysis of modern economies, or social systems of innovation and production, can be made using the concepts of complementarity and hierarchy of institutions. Institutional arrangements are complementary to each other and thus define the coherence as well as the potential for evolution of the various economies. The hierarchy of institution expresses which part of the institution drives the others, and is helpful for understanding historical evolutions. The article proposes a classification of developed economies and draws some conclusions regarding the usefulness of ...

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Institutional complementarity and diversity of social systems of innovation and production

The study of institutions and innovativeness is presently high on the agenda of the social sciences. There is increasing concern with how a society's innovativeness is associated with its international competitiveness. And as scholars study why the innovative styles of societies vary there has been increasing concern with how the institutional makeup of a society influences its particular style of innovativeness. However, before there can be significant advance in the study of this problem, it is important that we have a better understanding of what constitutes institutional analysis. Every social science discipline – with the exception of psychology – has at least one distinctive strategy for doing institutional analysis. And it is because of the lack of consensus as to the appropriate boundaries and content of institutional analysis that we have limited ability to make theoretical advances in understanding how the institutional makeup of a society impacts on its innovativeness. Recognizing that this is ...

Doing institutional analysis: implications for the study of innovations

The variety of capitalism school (VOC) and regulation theory (TR) are both analyses of the diversity of contemporary national economies. If VOC challenges the primacy of liberal market economies (LME) and stresses the existence of an alternative form, i.e. coordinated market economies (CME), TR starts from a long-term analysis of the transformation of capitalism in order to search for alternatives to the Fordist regime that emerged after the post-Second World War era. Both approaches make intensive use of international comparisons, challenge the role of market as the exclusive coordinating mechanism, and raise doubts about the existence of a 'one best way' for capitalism. Finally, they stress that globalization does deepen the competitive advantage associated with each institutional architecture. Nevertheless, their methodology differs: VOC stresses private firm governance, whereas TR considers the primacy of systemic and macroeconomic coherence. Whereas for VOC there exist only LME and CME, TR recurrently finds at least four brands of capitalism: market-led, meso-corporatist, social democrat and State-led. VOC seems to consider that the long-term stability of each capitalism can be challenged only by external shocks, but TR stresses the fact that the very success of a regulation mode ends up in a structural crisis, largely endogenous.

https://www.econstor.eu/bitstream/10419/19918/1/dp05-4.pdf

How and why capitalisms differ

A RETURN TO FREE MARKET CONCEPTIONS: WHY? The conceptions about the self-regulating mechanisms associated with markets have undergone the equivalent of a long wave. During the Great Depression of the 1930s, a majority of economists were critical of the institutional impediments to the free functioning of markets. Only a minority argued that it was in the very nature of free markets to trigger large instabilities and/or stagnation (Weir and Skocpol, 1985). After World War II, the Keynesian heterodoxy became the core of significant revolution concerning the respective roles that the state and market should play in the long run social and economic reproduction of capitalism: Adequate public regulation and fine tuning of monetary and fiscal policies could promote quasifull employment, along a steady growth path. Basically market mechanisms had to be tamed by a series of legislation, regulation, and collective agreements, as well as built-in stabilizers in the tax system and/or in the reaction functions of central banks. As Joan Robinson recurrently pointed out, markets were efficient for allocating scarce resources between alternative goals via the formation of relative prices. But one major drawback resulted from the fact that pure market mechanisms were generally unable to provide full employment and macroeconomic stability. In fact during the fifties and sixties this view was widely shared by almost all governments, including the most conservative ones. Did not Richard Nixon declare, “Now we are all Keynesians”?

Robert Boyer

Papers

Contemporary Capitalism: The Variety and Unequal Performance of Really Existing Markets: Farewell to Doctor Pangloss?