Showing papers in "Economy and Society in 2009"

Economization, part 1: shifting attention from the economy towards processes of economization

Abstract: This article proposes a research programme devoted to examining ‘processes of economization’. In the current instalment we introduce the notion of ‘economization’, which refers to the assembly and qualification of actions, devices and analytical/practical descriptions as ‘economic’ by social scientists and market actors. Through an analysis of selected works in anthropology, economics and sociology, we begin by discussing the importance, meaning and framing of economization, as we unravel its trace within a variety of disciplinary backgrounds. We show how in combination, these works have laid the foundations for the study of economization. The second instalment of the article, to appear in the next volume of Economy and Society, presents a preliminary picture of what it might mean to take processes of economization as a topic of empirical investigation. Given the vast terrain of relationships that produce its numerous trajectories, we will illustrate economization by focusing on only one of its m...

The role of venture capital firms in Silicon Valley's complex innovation network

Abstract: We still poorly understand why Silicon Valley has originated so many breakthrough innovations and large companies. The durability of Silicon Valley's innovative competence over the last seventy years also needs more explanation. The failure of several policy-makers around the world to reproduce the Silicon Valley cluster reveals the misunderstanding of the innovative dynamic in Silicon Valley. This study uses complex network theory – CNT (Barabasi, Newman & Watts, 2006; Jen, 2006; Thompson, 2004a) to analyse the complex innovative capability of Silicon Valley and to understand the heterogeneity of agents and the multiplexity of ties that support creation and development of high-tech start-ups. As proposed by Barabasi (2002, p. 200), we view the economy as a complex network, whose nodes are companies and whose links represent the various economic and financial ties connecting them. Innovation and entrepreneurship are understood as resulting from the interactions of numerous economic agents. In a s...

Capitalist diversity and diversity within capitalism

Abstract: At the heart of debates around internal diversity within specific national contexts lie the questions of social action and the relative impact of institutional concentrations at spatial, industrial and specific hierarchical levels. Internal diversity represents the product of specific historical legacies and the uneven nature of change, the effects of transnational players and regulation, the operation of complementarity, and of regional and sectoral dynamics. This article introduces a range of perspectives on conceptualizing internal diversity within national manifestations of capitalism, and provides a framework for the subsequent articles that constitute this special issue.

Governing insecurity: contingency planning, protection, resilience

Abstract: How should we understand the politics of security today? This article addresses this question from one particular perspective, that of 'biosecurity'. It examines contemporary strategies for managing biorisks in three European states: France, Germany and the United Kingdom. We suggest that the framing of threat and response differs, even within Europe, and that one can identify three different configurations: contingency planning, protection and resilience. Each of these embodies a significantly different way of reconciling fundamental imperatives for those who would govern a liberal society today - the imperative of freedom and the imperative of security.

Regional and sectoral varieties of capitalism

Abstract: This study seeks to go beneath the generalizations that constitute characterizations of national economies in order to examine local and sectoral diversity – in particular, forms of capitalist organization at the level of localized sectors. It reports on the findings of research based on detailed case histories of local economies in four different types of production: modernized craft manufacturing (furniture), mass production (motor vehicles), high-technology production (biopharmaceuticals) and high-tech services (television film-making). In each case a local economy in Germany (usually seen counter-factually as an example of a particularly national system) was compared with one elsewhere in Europe: respectively, southern Sweden, Hungary (compared with eastern Germany) and the UK (for two studies). In the analysis, companies act rationally in response to sector-specific challenges, being partly bound by the existing institutional framework that they encounter, but partly acting to alter it. Two ...

Inequality in developed countries and Latin America: coordinated, liberal and hierarchical systems

Abstract: The first half of this article explains the enduring disparities in inequality and welfare states across advanced economies in terms of varieties of capitalism and political systems. Where capitalism is coordinated, as in much of northern Europe, political systems are consensus-based with proportional representation (PR); consensus politics and coordinated capitalism reinforce each other in generating relatively low inequality and strong welfare states. Where capitalism is liberal – the Anglo-Saxon countries – political systems are competitive with majoritarian voting: mutual reinforcement of politics and capitalism generates relatively inegalitarian outcomes and safety-net welfare states. The second half of the article develops a model of hierarchical capitalism to show how this reinforces and is reinforced by a Latin American political system with majoritarian presidents and PR legislatures to generate high and persistent inequality and reduce development options.

Labour markets and the (hyphenated) welfare regime in Latin America

Abstract: This article deploys a welfare regime approach to examine changes in social policy in Latin America since the ‘lost decade’. Before the ‘lost decade’ the welfare regime in Latin America could best be described as ‘conservative/informal’. It was ‘truncated’ because the main welfare institutions, social insurance and employment protection, did not extend beyond workers in formal employment. The article shows that the structure of the labour market was the main stratification device, and argues that labour-market liberalization and new forms of social assistance are producing a shift towards a ‘liberal-informal’ welfare regime, ‘hyphenated’ rather than ‘truncated’.

The rise of internal capitalist diversity? Changing patterns of finance and corporate governance in Europe

Abstract: The article examines internal diversity within national models of capitalism in Europe, with a particular concern with firm financing and corporate governance patterns. It is suggested that a relatively small number of firms have shifted to a new institutional context consisting of common international institutions and practices, while the large majority of firms continue to operate in a more slowly evolving set of domestic institutions or rules. Examining changes since the early 1990s in firm financing and corporate governance, the article finds preliminary evidence to support the thesis of increasing diversity, but also that national patterns of firm finance are still distinct. Rising diversity challenges the long-term viability of coordinated market economies in Europe.

Globalization, multinationals and institutional diversity

Abstract: This article aims to explore the impact of globalization and in particular multinationals on diversity within national varieties of capitalism. Do the actions of multinationals create more diversity within national systems, do they reduce diversity or do they have relatively little impact on diversity within national systems? The article argues that there are distinctive structures of institutional diversity across different national systems. Therefore, the question is not how do MNCs impact on institutional diversity per se but how do they impact on these different structures of diversity? In order to develop this argument, the paper also differentiates types of multinational. The article uses distinction between market-seeking, resource-seeking, efficiency-seeking and strategic asset-seeking in order to identify a range of different MNC activity across manufacturing, professional and financial sectors. These different sorts of MNC activity vary across time and contexts in terms of their significance. The article looks in detail at four different models of capitalism and examines how the entry of different sorts of multinationals with distinctive objectives impacts on the relationships between key social actors which underpin and reinforce these models. In this way, it suggests how institutional diversity within different types of capitalism may evolve under the impact of MNCs and globalization.

Italy: rise, decline and restructuring of a regionalized capitalism

Abstract: During recent decades, the varieties of capitalism approach has provided one of the most important contributions on the analysis of advanced capitalism. However, there are national experiences that seem to be hard to explain from this theoretical perspective. In this artricle we underline that this is particularly true for countries that are characterized by a high degree of internal diversity, such as the Italian case. For this reason we propose to combine the national and regional dimensions, studying what can be defined as a ‘regionalized capitalism’: a complex and heterogeneous system that entails both remarkable dysfunctions and elements of strength. Analysing the Italian case, we show the importance of centre–periphery relations, which produce a mix of local economic dynamism and national public disorder (public deficit and debt, inefficient policies). At a local level, SMEs and their networks cooperate in a flexible and neo-voluntaristic way to produce territorial competitive advantages: a...

Eclipse or reconfigured? South Korea's developmental state and challenges of the global knowledge economy

Abstract: Globalists and former students of the Asian developmental state maintain that the latter has succumbed to the forces of globalization. They believe that the global knowledge economy involves the thorough integration of the global economy, continuous innovation and networks rather than hierarchies and that these factors are foreign to the operational logic of the developmental state and thus render it obsolete. This article contends that the global economy is not as open as supposed, and that the challenges posed by the knowledge economy, while genuine, tend to be uneven. Focusing on Korea's information technology sector and relying on documentary and interview data, the present article suggests that, while the Korean state no longer relies on its erstwhile finance and regulation strategies, it has continued to articulate development visions and sought to achieve them through deploying public resources to structure the market. Rather than going into eclipse, the Korean developmental state has been...

‘Flexicurity’ as a policy strategy: the implications for gender equality

Abstract: The 'flexicurity' strategy reached the top of the European Union's policy agenda in the mid-2000s. The strategy assumes an adult worker model family and aims to promote better, as well as more, jobs and to ensure that policies should further both flexibility in the labour market and security for workers. The article explores, first, the meaning of internal and external flexibility, and of employment-based security and the different implications for men and women. While the policy documents assume that flexicurity will increase gender equality, the mechanisms have not been specified. In fact, as the article shows, women are often more 'flexible' workers than men, particularly regarding their contractual arrangements and hours of employment. However, they tend not to be economically autonomous and, we argue, the supply-side policies advocated on the security side of the flexicurity matrix are insufficient to improve their position, which is strongly related to the gendered divisions of paid and unpaid work.

Social policy and economic development in South America: an historical approach to social insurance

Abstract: This article examines the structural and organizational problems facing social insurance systems in Brazil and the Argentine through the twentieth century. It provides insights which inform contemporary debates about pension reform in Latin America. This area of social policy intervention is central to ongoing analyses of state competence and state capacity that in turn inform efforts to theorize about the state. Much of the present discussion depicts social insurance 'crisis' as a modern phenomenon. Similarly, preoccupations with the macroeconomic objectives of reform, such as the promotion of profitable pension funds as an adjunct to capital market deepening, long-term sustainability, equity and coverage, are often assumed to be peculiar to the late twentieth century. By contrast, this article stresses the generational and cyclical nature of the crises that have plagued social insurance regimes in both countries. It notes that pension funds established for influential groups of workers in the early twentieth century quickly developed substantial deficits and that this was a key factor driving the extension of social insurance (and hence the pool of contributors). Financial instability was exacerbated by states frequently raiding pension funds in lieu of effective fiscal systems. As part of this, the article analyses historic shifts between different social insurance 'models' (individual, capitalized accounts versus pay-as-you-go schemes and monopolistic state systems versus competitive arrangements), evaluating their impact on coverage, equity, financial stability and administrative effectiveness. The article also identifies what may be learnt from differences, as well as similarities, between the two systems. Key points of divergence include the relatively large historic role of the private sector in Brazil and the earlier substantive provision for rural workers there. These differences call into question assertions about the common nature and origins of social insurance crises in Latin America, and in turn about the nature of the state itself. The article finds that, unlike models of Western European welfare capitalism with which they are sometimes compared, social insurance regimes in Brazil and the Argentine were precocious and institutionally fragile. They were also ad hoc and subject to repeated 'reform'. For much of the second half of the twentieth century, the economic weight of the state in middle-income Latin American countries (particularly as regards economic outreach and social policy interventions) seemed to approach that of socialist countries in Eastern Europe. Yet the 'ideology' of growth often owed more to liberal capitalism, echoing East Asia's emphasis on 'state-supported late industrialization'. These contradictions are neatly captured in the historical trajectory of social insurance systems, which demonstrate that Latin American does not fit neatly with categorizations established in the varieties of capitalism discourse.

The political economy of modernity: Foucault's Collège de France lectures of 1978 and 1979

Abstract: Michel Foucault's 1978 and 1979 lecture courses at the College de France were first published in 2004, and have recently been published in English translation. Their chief theme is the political economy of modernity, and this article examines the manner in which Foucault constructed his conception of governmentality in two phases: the political economy of seventeenth- and eighteenth-century Europe and the origins of twentieth-century German ordoliberalism and American neoliberalism. In the case of the twentieth century, particular emphasis is given to the sources upon which Foucault drew, seeking to determine how Foucault constructed his lecture presentations, and hence identify the particular originality of his arguments.

Commodity, gift and mass-gift: on gift–commodity hybrids in advanced mass consumption cultures

Abstract: While ‘gifts’ and ‘commodities’ as theoretically distinct forms of circulation are central to economic sociology and anthropology, we argue that in practice they are often hybridized. Inspired by Bruno Latour's work, we first describe the use in supermarkets and chain stores of one hybrid category, the mass-gift, which is neither a commodity nor a gift. Through our empirical investigation of sales interactions we critically describe the emergence of a vibrant mass-gift economy in which the meaning of ‘gifts’ and ‘commodities’ as well as their hybrid forms is infused with ambiguity which is strategically played out by agentive social actors throughout the sales process. We suggest going beyond depictions of mass-gifting as merely a calculative strategy for promoting sales. Instead, we illustrate how mass-gifting establishes a relational space in which actors can negotiate the ambivalence of the cultural script of the ‘gift’: they can re-qualify the seller–buyer relationship as a socially binding o...

The Japanese firm and its diversity

Abstract: While institutional theory has tended to ignore the diversity of firms within national models of capitalism, recent change in the Japanese model of capitalism has been associated with a growing diversity of corporate governance practices. The article builds on previous empirical results to propose an empirical mapping of corporate governance practices in Japan using a cluster analysis of a large sample of Japanese firms in 2002. Alongside the traditional Japanese pattern, the empirical results show that two new 'hybrid' models of corporate governance have emerged characterized by different linkages between corporate ownership and finance, board practices, and employment patterns. These changes reflect both a loosening of past institutional constraints related to main bank finance and growing responsiveness to diverse organizational and sector-level contingencies.

Economic development and social policies in Mexico

Abstract: Since the mid-1980s Mexico has implemented a radical reorientation of its development strategy away from state - led industrialization and trade protection. This reform has drastically reduced the role of the state in the economy in favour of market mechanisms, and changed the orientation of social policies towards targeting and decentralization. The article examines the effects of this reform on Mexico's social and economic development, and finds that its results have been far from stellar. Indeed, notwithstanding the reduction of inflation and the downsizing of the state, the economy has expanded at a slow rate way below its growth in needs. The author conclude that if Mexico is to succeed in its quest to enter a path of robust long - term development it will need to modify its social and economic policies.

What's in the frame? How the financial crisis is being packaged for public consumption

Abstract: The financial crisis continues unabated, escalating almost on a daily basis. But how is it being framed for public consumption? What kind of narratives are emerging that will tell the story of the ...

Understanding Latin American political economy: varieties of capitalism or fiscal sociology?

Abstract: Ben Schneider and David Soskice trace the origins and reproduction of Latin America's ‘hierarchical’ market economies to the perverse synergy of: 1) free-market economic reforms that systematically atomize (or demobilize) low-income constituencies; 2) majoritarian presidential elections that no less systematically ensure middle-class support for an upper-class agenda marked by labour market dualism, educational elitism, corporate conglomeration, and associational underdevelopment; and 3) proportionally-elected legislatures that are particularly susceptible to corporate influence. I worry that in their haste to incorporate Latin America into the varieties of capitalism framework, however, Schneider and Soskice: 1) overlook the Iberian roots of the region's principal economic institutions; 2) confuse symptoms like ignorance, informality, and corporate conglomeration with causes like inequality and fiscal underdevelopment; and 3) ignore not only the possibility but the likelihood of left-wing mobili...

Latin American capitalism: economic and social policy in transition

Abstract: During the last three decades, and contrary to expectations, Latin America's economic performance has been poor and many of its structural weaknesses have deepened. Despite the recent export commod...

Investigating the potentially contradictory microfoundations of financialization

Abstract: The existing academic literature on financialization points to multiple instances in which firms attempt to demonstrate the vitality of their stock-market position in ways which ultimately prove to be self-harming. I demonstrate, in the first instance as a matt er of immanent logic, that these actions are linked to the interplay of contradictory tendencies in the microfoundations of financialization. Under conditions of financialization, firms create additional sources of credit to capitalize their productive activities by driving their stock price into greater increases than the market average, thereby generating capital gains. Yet, the more it becomes public knowledge that the financing tricks used to inflate the stock price provide no productive benefit to the firm, the more it would seem to create incentives for fund managers to hold portfolios that replicate the stock market as a whole. In this way, they will minimize their exposure to financial misrepresentation. Such a stance undermines financialized business models, but it does in any case conform to fund managers' basic theoretical training, which revolves around the logical demonstration that an individual stock cannot systematically out-perform the market average. I review the available empirical studies of fund manager decision-making to show that they find against the existence of a simple performativity loop operating between finance theory and fund manager behaviour. However, on many points the empirical evidence does confirm the theoretically derived conclusion concerning the potentially contradictory microfoundations of financialization. Fund managers often do act in a way which is consistent with finance theory's core claim that an index-tracking strategy represents the only equilibrium portfolio, even if this is only rarely as a result of the direct performativity of the theory.

State, firms and the process of industrial upgrading: Latin America's variety of capitalism and the Costa Rican experience

Abstract: This article explores the usefulness of the varieties of capitalism approach to explain Latin America's failure to secure industrial upgrading. Based on the analysis of Costa Rica's partial success in developing high-tech sectors, the article makes two arguments. First, the hierarchical market economy model discussed by Soskice and Schneider in this special issue contributes to our understanding of some of Latin America's problems. In particular, the model's accent on negative complementarities between large business groups, transnational corporations and the labour market explains the persistent lack of innovation and the maintenance of structural heterogeneity. Second, however, the recent expansion of new production activities in Costa Rica signals the limitations of the model and the need to incorporate the state as a central variable. It was bureaucratic leadership and not private-sector demands that triggered the expansion of social spending and the attraction of more dynamic foreign investo...

Envisioning financial disorder: financial surveillance and the securities industry

Abstract: With the emergence of increasingly digitized and electronically mediated financial markets has come a host of new technologies that seek to convert this new-found transparency into opportunities for financial monitoring and oversight. Adopting the term ‘financial surveillance’ as a descriptor for these emergent regulatory technologies, this article first develops this concept and then provides an in-depth analysis of one specific form of financial surveillance: the real-time monitoring of financial markets for breaches of trading rules through the use of sophisticated mathematical algorithms and computerized assessment tools. Based on interviews with the members of one agency, Market Regulation Services Inc., that performs this service on behalf of a number of individual marketplaces, the article examines the possibilities and limits of this surveillance technology as a mode of financial governance, and probes its larger significance as a regulatory device engaged in a particular performance of t...

Changes in developed countries’ economic systems since the 1980s: implications for developing countries

Abstract: This article reviews changes in institutional arrangements among developed countries over the past twenty-five years, and assesses how far these can be explained in terms of recent theories of different models of capitalism. It argues that globalization has acted to undermine central features of the key models and weaken the position of labour. The account in this article points to limitations in the current varieties of capitalism approaches in explaining recent patterns of institutional changes and sketches possible bases for enhancing the approach. Comparisons are made with economic systems in developing countries, particularly in Latin America.

Neo-structuralism and reforming the Latin American state: lessons from the Irish case

Abstract: Since its first formulation in the 1990s, CEPAL's neo-structuralist paradigm has acted as an alternative policy paradigm to neo-liberalism in the region. While it has been much criticized, it is now being seen by some as the inspiration for the alternative to neo-liberalism that the new left-wing governments in the region are seeking to implement. In the light of this, a critical examination of what these ideas mean in practice is of major importance. This article argues that the new model of governance that has helped transform the Irish economy over the past two decades bears resemblance to key tenets of the CEPAL paradigm. The article begins by surveying the recent literature on state reform in Latin America, highlighting certain themes that emerge but also issues that are insufficiently developed. It goes on to outline key elements of the ECLAC neo-structuralist paradigm and examines how the Irish ‘model’ echoes its twin objectives of changing productive patterns with social equity, as well a...

Reinventing the Hong Kong state or rediscovering it? From low interventionism to eclectic corporatism

Abstract: The low-intervention state of Hong Kong in colonial times did not originate from strong neo-liberal ideological convictions. It was an artefact of the colonial political configuration, a pragmatic governing strategy adapting to the political and economic needs at the time. Political changes, economic restructuring, divestiture and marketization of state institutions since the 1980s had brought a new state form after 1997. A new business and professional elite class, embedded in an eclectic corporatist structure, evolved and brought multilateral, ad hoc and particularistic bargaining, leading to more sectoral intervention after 1997. Fragmented state institutions nonetheless weakened state capacity, making it difficult for the post-1997 state to be highly penetrative, transformative or developmental.

Currency devaluations and consolidating democracy: the example of the South African rand

Abstract: In 2001 the South African rand depreciated suddenly and steeply against the dollar and euro. This triggered inflation as the prices of imported products gapped upward. To offset the imminent inflationary effects and attract foreign exchange, the Reserve Bank raised interest rates, resulting in slower domestic growth. The critical question was the cause of the currency depreciation. We argue here that the rand's decline was the result of a concatenation of internal and external factors, specifically the way the operations of the global financial markets magnified and exacerbated the effects of internal financial policy decisions. The article illustrates the heightening connectivity between domestic policy decisions aimed at regulating the national economy and the globalizing financial markets that operate on an altogether different logic. The Reserve Bank's attempt to regulate the local foreign exchange regime in concert with the corporate use of financial instruments to circumvent these exchange ...

Recognition, reification and (dis)respect

Abstract: Axel Honneth was already recognized as the leading figure in the ‘third generation’ of critical theory, long before he took up, in 1996, Habermas's chair in philosophy at Frankfurt and the directorship of the Institut fur Sozialforschung. He has for a long time been reconceptualizing Frankfurt critical theory in terms of an originally Hegelian conception of recognition, and associated notions of respect and disrespect – a model which brings out a concern with human suffering which was a strong feature of the first generation of critical theorists. This volume of translated essays, together with a recent volume in German and his 2005 Tanner Lectures on reification, provides a good opportunity to triangulate Honneth's developing work.

Does Corporate Social Responsibility Affect the Performance of Firms

Abstract: Over the last two decades in OECD countries increasingly more firms are certifying as Socially Responsible (CSR is the acronym for Corporate Social Responsibility). This kind of certification is assigned by private companies that guarantee that a certain firm’s behaviour is environmentally and sociologically correct. Some papers (including Preston and O’Bannon, 1997; Waddock and Graves, 1997; McWilliams and Sieger, 2001; Ullman, 1985) tried to establish if there exists a link between Social Responsibility certification and the performance of firms. Their results were ambiguous and did not show any common connection. This ambiguity depends mainly on the static nature of their analyses and on the problem of whether performance is affected more by certification costs or by increasing sales due to an effect on reputation. Our work would like to discover whether certain performance indicators are affected by a firm’s social responsible behaviour and their certifications by looking at panel data. The novelty of our analysis is due to its dynamic aspect and from a CSR index that intersects two of the three main international indices (Domini 400 Social Index, Dow Jones Sustainability World Index, FTSE4Good Index), to be objective and obtain a representative sample. The main results seem to support the idea that CSR firms which are more virtuous, have better long run performance. They have some initial costs but obtain higher sales and profits due to several causes reputation effect, a reduction of long run costs and increased social responsible demand.

능력주의에 대한 공동체주의의 해체 : 능력·공과·필요의 복합평등론

Abstract: 능력주의는 개인의 능력에 따라 선발되어 위계적 사회체제에 배치, 분배받는다는 원칙인데 한국인을 지배하는 꿈이자 마음의 습관이라 할 만하다. 능력주의를 공동체주의로 해체한다 함은 능력의 차이를 부정하는 것이 아니라 능력에 한정된 영역을 할당하고 다른 능력 개념인 공과를 맞세우는 것이다. 자유주의 사회에서 능력과 그 산물은 개인의 것이고 불평등을 강화, 정당화 한다. 또 자유주의의 가치판단 보류와 보편주의 옹호는 능력에 대한 지배관념을 반영하고 주어진 사회에 순응하는 것을 능력으로 보게 한다. 그래서 자본주의가 희구하는 유연한 노동력으로서의 ‘잠재력’이 능력이라면서 인간 존재의 윤리적 가치까지 일도양단하기에 이르는 것이다. 공적 집합체의 성원으로 인간을 본다면 첫째, 공과가 중시된다. ‘공과’는 과거에 한 일의 가치를 그가 속한 실천공동체, 지역공동체와 관련하여 판단하는 것이며 각각의 실행과 실천으로 윤리적 특성을 갖는 존재의 복합적 판단이다. 둘째 공동체의 이념적 자기상에 의거해 모든 성원들의 필요가 정치적으로 논의, 충족된다. 복합평등 원칙 속에 능력은 탈신비화되어 시장의 자유교환에 맡겨지고 시장이 야기한 불평등은 특수주의에 의거한 공과라는 다른 분배원칙이 낳는 여러개의 불평등으로, 다른 한 편으로는 필요의 평등원칙으로 제한된다. 거기서 다양한 ‘능력’의 시민-성원은 자존어린 이들의 연대어린 삶을 추구한다.