Diane Coyle — The capitalism we deserve

  Émile Durkheim held that collective consciousness is a key factor in sociology. Societies not only differ owing to culture and institutional arrangements, but also culture and institutional arrangements are both the product of the group mindset and also influence its transformation through influence on the mindsets of individuals. Sociology is a science to the degree that it can identify regularities in social behavior. 

Culture and institutions are analogous to mathematical functions with respect to outcomes of individual behavior in groups, so it is not surprising that patterns of social behavior can be identified and expressed rigorously. 

Societies are not merely aggregations of individuals making individual decisions independently based on individual preferences, as some have supposed. Not only is cross-influence operative, but also sets of rules, some implicit, like tradition, and some explicit, like law. Behavior is internally correlated by shared mindsets but and externally correlated by culture and institutions.

Capitalism is a socio-economic phenomenon exhibited by many societies. Being an expression of a shard mindset and established through custom and law, it is subject to these influences and follows rules. 

Capitalism's expression and transformations in particular societies is based on the level of collective consciousness of that society. The type of collective consciousness and their level in the sense of exhibiting inclusivity and universality that sociologists call "solidarity" fluctuates.

In this sense the culture and institutions that a society "deserves" is based on the level of collective consciousness. Because collective consciousness is not constant, it can be "improved" in the sense of increasing the sense of solidarity. This implies different varieties of capitalism based on different levels of solidarity, from the extreme individualism of laissez-faire to the managed capitalism of social democracy.

Historian Jürgen Kocka has written Capitalism: A Short History at 169 pages. What’s more, it spans the centuries from China during the Han Dynasty through the Arab empire and the European Middle Ages to global financial capitalism today.

The Enlightened Economist
The capitalism we deserve
Diane Coyle | freelance economist and a former advisor to the UK Treasury. She is a member of the UK Competition Commission and is acting Chairman of the BBC Trust, the governing body of the British Broadcasting Corporation

Daniel Little — Thelen on the prospects for egalitarian capitalism

There is a version of economic historical thinking that we might label as "capitalist triumphalism" [aka market fundamentalism and economic liberalism] -- the idea that the institutions of a capitalist economy drive out all other economic forms, and that they tend towards an ever-more pure form of unconstrained market society. "Liberalization," deregulation, and reduction of social rights are seen as economically inevitable. On this view, the various ways in which some countries have tried to ameliorate the harsh consequences of unconstrained capitalism on the least well off in society are doomed -- the welfare state, social democracy, extensive labor rights, or universal basic income (link). Through a race to the bottom, any institutional reforms that impede the freedom and mobility of capital will be forced out by a combination of economic and political pressures.

The graphs above demonstrate the current structural differences among Denmark, Sweden, Germany, Netherlands, and USA when it comes to training and income support for the unemployed and underemployed. It is visible that the four European economies devote substantially greater resources to support for the unemployed than the United States. And on the triumphalist view, the states demonstrating more generous benefits for the less-well-off will inevitably converge towards the profile represented by the fifth panel, the United States.… 

Thelen's most recent book, Varieties of Liberalization and the New Politics of Social Solidarity addresses the question of capitalist triumphalism. (That isn't a term that she uses, but it seems descriptive.) She locates her analysis within the "varieties of capitalism" field of scholarship, which maintains that there is not a single pathway of development for capitalist systems. "Coordinated" capitalism and neoliberal capitalism represent two poles of the space considered by the VofC literature.

From the beginning, the VofC literature challenged the idea that contemporary market pressures would drive a convergence on a single best or most efficient model of capitalism. (kl 228)

Thelen is interested in assessing the prospects for what she calls "egalitarian" capitalism -- the variants of capitalist political economy that feature redistribution, social welfare, and significant policy support for the less-well-off. She focuses on several key institutions -- industrial relations, vocational education and training, and labor market institutions, and she argues that these are particularly central for the historical issue of the development of capitalism towards harsher or gentler versions.…

A key finding in Thelen's analysis is that "coordinated" capitalism and "egalitarian" capitalism are not the same. Coordinated capitalism corresponds to the models associated with social democracies of the 1950s and 1960s, the "Nordic" model. But Thelen holds that egalitarian capitalism can take more innovative and flexible forms and may be a more durable alternative to neoliberal capitalism. 

Understanding Society

Thelen on the prospects for egalitarian capitalism
Daniel Little | Chancellor of the University of Michigan-Dearborn, Professor of Philosophy at UM-Dearborn and Professor of Sociology at UM-Ann Arbor

Capitalism is commonly misunderstood as being an economic system. Rather, it is a complex web of institutional arrangements the foundations of which are legal, hence, political. Difference in institutional arrangements result in varieties of capitalism.

Power is the underlying factor and not "capital," whatever than is. Those who/ve been paying attention to the Piketty "capital controversy" know that the debate hinges on the meaning of capital. The controversy reveals there is sharp divergence of views over capital.

Irrespective of how capital is defined, there are varieties of socio-economic theory and ideology that underly different political systems as determined by their legal arrangements. These result in varieties of ownership, distribution, and other socio-economic categories and classes. The economics follows from the institutional arrangements and these are political choices that ayer determined by power relationships.