World System, Varieties of
Capitalism, or Variegated
Capitalism? Implications for the
Study of Asian Political Economy
Bob Jessop
Lancaster University
Outline
• What is capitalism?
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World system theory
Varieties of capitalism: rival approaches
Variegated capitalism
World market and variegated capitalism
Eurocentrism and/or Amerocentrism
Variegated Capitalism in Asia
Pathological (in)compossibility?
Conclusions
Analytical Strategies
.
Empirical observation of actual cases, aims to be complete, and
Taxonomic
includes horizontal and vertical ordering of taxa. Different bases of
Classification classification produce different taxonomies but each taxon is pure.
Heuristic
Typologies
Construction of theoretically-guided ideal types. Number of types
constructed varies with aim. Different heuristic purposes produce
different typologies. Accepts impurity and hybridity of cases
Statistical
Induction
Induction from statistical analysis of a population or a purposive
sample of cases to identify more or less distinct clusters, their
relative proximity, and their nesting in given property space.
Theoretically Theoretically-guided reconstruction of actual cases; concepts may
well be modified in course of analysis. Number of types depends on
-Informed
Comparison concreteness-complexity of given research object.
CAPITALISM
Rational
Capitalism
Political
Capitalism
Traditional
commercial
capitalism
Mode #1
Mode #2
Mode #3
Mode #4
Mode #5
Mode #6
Trade in
free markets
& capitalist
production
Capitalist
speculation
and finance
Predatory
political
profits
Profit on
market from
force and
domination
Profit from
‘unusual’
deals with
political
authority
Traditional
types of trade
or money
deals
Weber’s Typology of Capitalism (Based on Swedberg 1998)
Weber versus VoC Literature
• Weber distinguishes six types of capitalism
• Recent VoC studies mostly examine variation within
the two sub-types of ‘rational capitalism’:
– trade in free markets and capitalist production
– capitalist speculation and finance
• So these studies ignore Weber’s three sub-types of
political capitalism + traditional commercial capitalism
– former have key role in global economy
– commercial capitalism is also significant
Marx and Capitalism
• Marx’s account of capitalist mode of production is
mostly concerned with rational capitalism too
– he wants to show that modern capitalism rests on profitoriented, market-mediated accumulation
– in which exploitation takes the form of exchange
• But he does study role of political capitalism in
primitive accumulation (and colonialism) and in
specific contexts (e.g., Bonapartist France)
• He also contrasts merchant capital with logic of
industrial capitalism based on machinofacture
Marx on the World Market - I
The most developed mode of
existence of the integration of
abstract labour with the value form
is the world market, a place in
which production is posited as a
totality together with all its
moments, but within which, at the
same time, all contradictions come
into play (Grundrisse: 227)
Wallerstein on Modern World System
• Single logic of capital based on
economic and military
competition among capitalist
powers to capture surplus,
however generated
• Exploitation occurs at world
scale – based on division of
world into centre, semiperiphery, and periphery
• Mobility in world system is
shaped by competitive logic of
system plus players’ strategies
WS Approach to Capitalism
• AG Frank and Wallerstein study rise of modern world
system based on expansion of traditional
commercial/mercantile capitalism from Europe
• Arrighi studies successive hegemonies based on
territorial expansion (political capitalism) or on
capital flows (commercial/rational capitalism) and is
sensitive to financialization and its crisis-tendencies
• All three highlight world system logic but Arrighi
views this logic more dialectically and is more
concerned with multiple aspects of hegemony
Marx on the World Market - II
The movement of capital, though much accelerated, still
remained, however, relatively slow. The splitting up of the
world market into separate parts, each of which was
exploited by a particular nation, the exclusion of
competition among themselves on the part of the nations,
the clumsiness of production itself and the fact that finance
was only evolving from its early stages, greatly impeded
circulation’ (Marx and Engels, German Ideology)
This lack of integration informs study of varieties of capitalism
Varieties of Capitalism (VoC)
• Pluralistic logic based on VoC,
each with its own dynamic
• Path-dependent ensembles of
institutional complementarities
that efficiently solve critical
coordination problems of
capitalist production
• Global dynamic reflects
institutional as well as profitoriented, market-mediated
competition among VoC
Some Limits to VoC Analysis - I
• Most recent VoC approach is firm-centred and focuses on
organization of firms qua “productive capital”; has fewer
concepts for analyzing capitalist speculation and finance
• Adopts rational choice (or Coasian) analysis and historical
institutionalism, studies co-selection of efficient (extra-)
economic institutions for macro-economic performance
and global competitiveness in specific sectors
• It assumes separation of economic and political
institutions, analyses state as one institutional complex
among others, and regards political regime change as
exogenous (e.g., rise of neo-liberalism) rather than
aspect of economic strategies of some fractions
Some Limits to VoC Analysis - II
• VoC work views private and public banks chiefly as
intermediaries in allocating capital to profitable nonfinancial activities, sees financial innovation in this light
• Hence ill-equipped to study autonomization of financial
capital and its diverse effects on firms’ performance
• Latest VoC approach evolved during “great moderation”
(benign conditions in advanced capitalist economies): so
crisis, stagnation, inflation were off VoC research horizon
• But great moderation can be seen as first stage in Minsky
super-cycle (financial tranquillity, fragility, vulnerability),
with so-called “global financial crisis” as its culmination
Some Limits to VoC Analysis - III
• Historical institutionalism in VOC helps distinguish stages
of capitalism and also facilitates comparative research
• Analysis of institutional complementarities and microfoundations helps explain relative stability of some VoCs
• Institutional analyses ignore capitalism’s generic features
and the abstract potential for crisis in its incompressible
contradictions. Limits capacity to explain impermanence
of any spatio-temporal fix, whether linked to VoC or not
• Mid-range analyses also neglect self-organizing dynamic
of profit-oriented, market-mediated capitalism and its
ecological dominance, promoting completion of world
market and helping to realize all of its contradictions
Regulationist Approaches to VoC
• RA based on basic contradictions of capital relation, not
efficient institutional solutions to coordination problems
• Accumulation regime: a complementary pattern of
production and consumption that is reproducible over a
long period despite contradictions and crisis-tendencies
• Mode of regulation: emergent ensemble of norms,
institutions, organizational forms, social networks, and
patterns of conduct that can temporarily stabilize an
accumulation regime despite the conflictual and
antagonistic character of capitalist social relations
• Mode of development: AR + MoR + societal paradigm
A Marxist View of “Capitalism”
• Wealth appears as immense accumulation of commodities
• Commodity form generalized to labour-power (which is a
fictitious commodity but treated as if it were a commodity)
• Duality of labour-power as concrete labour and labour time
• A political economy of time (note especially the constant
rebasing of abstract time
treadmill effects)
• Key role of money as social relation in mediating profit-oriented,
market-mediated accumulation process
• Essential role of competition in dynamic of capitalism
• Market mechanism cannot secure all conditions of capitalist
reproduction (even ignoring labour process)
Some Foundational Contradictions
Form
Value Aspect
Material Aspect
Commodity
Exchange-value
Use-value
Labour-power
Abstract labour
Concrete skills
Wage
Cost of production
Source of demand
Money
Interest-bearing capital
International currency
Measure of value
National money
Productive
capital
Abstract value in motion
Stock of specific assets
Knowledge
Intellectual property
Intellectual commons
“Nature”
Absolute + differential rent
Spaceship earth
State
“Ideal collective capitalist”
Factor of social cohesion
The Significance of Contradictions
• These (and other) contradictions are incompressible but
weight varies across stages and “varieties” of capitalism
• Contradictions dilemmas (does State treat wages,
including social wage, mainly as source of demand –
Keynesian welfare; as cost of [international] production –
neoliberal retrenchment; or both – as in flexicurity?).
• Handling of these contradictions shapes later crises (e.g.,
Keynesian welfare state is weakened as wage qua cost,
money qua currency, get more significant, limiting crisismanagement capacities, damaging social compromise)
• This does not determine forms of next spatio-temporal
fix(es), these depend on path-shaping initiatives and the
new challenges to accumulation at different scales
Form
Focus of VoC
Neglected in VoC
Commodity
Asset specificity of use-value and price Exchange-value, price formation in
formation of particular commodities
relation to OCC and average profit rate
Wage
relation
Individual and social wage; pay design; Determinants of real pay, labour power
industrial relations; role of supervisors as fictitious commodity, surplus value,
and managers in technical efficiency
management as powers of capital
Labour
Power
Skill and skill formation; vocational
training; education; human capital
Firm
Core competencies and assets, nexus Capitalist enterprise and node in circuit
of contracts, firm size & market power; of capital; market dominance and
clusters, networks, value chains, etc
monopoly profit; place in world market;
Capital
Assets to be valorized in given timeplace, profits available to invest
Capital in general available to allocate to
any (un)productive purposes
Knowledge
Human capital, R&D, tech transfer,
incremental or radical innovation
Abstract labour; general intellect; IPR as
fictitious commodity
State
Efficient solution to coordination
problems; focus of stakeholder
pressure to enhance competitiveness
Separation of market and state is
problem for accumulation, ditto, single
world market vs plurality of states
Abstract labour; value theory of labour;
socially necessary labour time
Regulation Approach Concepts
• Generally analyzed in terms of five dimensions:
– Wage relation (including capital-labour compromise, social as
well as individual wage)
– Enterprise form and competition (including source of profits,
relations among sectors, corporate governance)
– Money and credit forms (hierarchies, national monies,
international currencies, currency pyramids, etc)
– State (institutionalized compromise, forms of governance)
– International regimes and modes of adhesion
• These structural forms are hierarchically ordered. They
could be complementary (stability) or one form could
dissolve coherence, produce crisis, or effect a transition
Structural
Form
Main Features
Impact on
Mode of Regulation
Impact on
Accum. Regime
Forms of
competition
Acute competition among
numerous and various entities
(firms, provinces, localities)
Tendency to constantly
declining production
costs and prices
Driving force of
accumulation
Wage-labour
nexus
• Dual status (rural/urban)
• Balkanized and serialized
• Absence of own collective
organization
Strong influence of the
large pool of rural
workers on competitive
wage formation
Unbalanced income
distribution: low
and declining wage
share
MonetaryDialectic between large-scale
credit regime decentralization and need for
control at macro-economic
level
Fine-tuning in reaction
to quickly evolving
domestic/international
economy
Tool to sustain and
manage a high
growth regime
State/
economy
nexus
• Pragmatic and anticipatory
central state
• Multi-level complex
governance
High reactivity to
emerging disequilibria
Periodic
reconfiguration of
institutional forms
International
regime
Selective insertion:
• Constraints on FDI
• Control of external current
account
• Specific domestic norms
Exchange rate is a key
political variable, plus
domestic credit, in
smoothing external
shocks
Trade surplus is
result of domestic
imbalances in
production/
Demand
Other Analyses of Asian Capitalism
Analysing Growth Regimes
• Regimes have different patterns of economic forms: each
form can be a principal or secondary site of institutional
and spatio-temporal fixes; primary and secondary aspects
change between regime en régulation and regime in crisis
• One way to use regulation approach is to consider how
different hierarchies of structural forms are formed, what
are the specific features of particular forms, whether the
dominant form is basis of complementarities with other
forms, or has decomposition effects.
• Adopting RA (including Amsterdam as well as Parisian
variants) points to modes of adhesion in world market
Institutional fixes
• Institutional fix: complementary set of institutions that,
via institutional design, imitation, imposition, or chance
evolution , offers provisional, partial, and relatively stable
solution to co-ordination problems involved in economic,
political, or social order (e.g., an accumulation regime)
• Historical institutionalism often proposed as suitable for
analysing genesis of institutional fixes and their effects
• From a strategic-relational perspective, institutions are
not neutral but involve specific biases, favouring some
actors, alliances, identities, interests, projects, spatiotemporal horizons, etc
Spatio-Temporal Fix
• An institutional fix that offers provisional, partial, and
relatively stable solution (in given parametric limits) to coordination problems of economic, political, or social order
• It sets spatial and temporal boundaries in which structural
coherence (and, so, institutional complementarities) of a
given order (here, an accumulation regime) are secured
• It externalizes material and social costs of securing
coherence beyond spatial, temporal, and social boundaries
of this STF fix by displacing and/or deferring them
• Even within these boundaries, some social forces forces
are marginalized, excluded, or subject to coercion  social
and political blowback “at home” as well as “abroad”
Variegated Capitalism in World Market
• Break with pre-given logic of world system and study its
more open-ended logic, which changes as modes of
integration of world system change
• Break with the parsimony of Hall/Soskice approach and
consider other varieties plus their interaction with other
(sub-)types of capitalism and the mutual, often
asymmetrical, constraints that this imposes on each
• One way to do this is via analysis of variegated capitalism
in emergent, changing world market that may exist in
shadow of a dominant “variety”
Variation versus Variegation
Varieties of Capitalism
Variegated Capitalism
Distinct (families of) local,
regional, national models
seen as rivals on same scale
or terrain for same stakes
Possible complementarities (or
not) in wider division of labour in
a tendentially singular, global but
variegated capitalism
Describe the forms of internal
coherence of distinct VoC on
false assumption that they
can and do exist in relative
isolation from each other
Zones of relative stability linked to
instability in or beyond national
spaces in a complex ecology of
accumulation regimes, modes of
regulation, spatio-temporal fixes
Varieties of Capitalism
Variegated Capitalism
Study temporal rhythms and
horizons of VoC as internal,
specific, short- or mediumterm, unrelated to long-term
global dynamic of capital
Analyse costs imposed on other
spaces and/or future generations
by uneven capacities to displace
or defer contradictions, conflicts,
and crisis-tendencies,
All varieties are equal and, if
one is more “productive” or
“progressive”, it could and
should be copied, exported, or
even imposed elsewhere
Some varieties are more equal
than others, with neo-liberalism
tending to ecological dominance.
Not all economic formations can
adopt the dominant model.
The German Model
• For VoC, Germany is the exemplar of Rhenish capitalism
(Albert) or coordinated market economy (Hall/Soskice)
– Limited role of financial markets compared to Hausbanken
– Emphasis on coordination through sectoral and regional
associations and networks of firms
– Ordoliberal social market economy rather than neoliberal
market economy
– Multiple stakeholders rather than emphasis on delivering
shareholder value
– Less flexible labour markets, more emphasis on reskilling
“Das Modell Deutschland”
• Virtuous circle of economic (growth, competitiveness),
social (social integration, low unemployment), and
political (crisis management) factors
• Facilitated by export-oriented, neo-mercantilist German
growth model, i.e., its insertion into European and world
markets, based on specialization in high quality
diversified production, capital goods, and, especially,
capital goods for producing capital goods
• Related to hierarchy and core-periphery relations in
international division of labour
Space-Time Fixes and World Market
• World market is not seamlessly integrated through trade
but develops in uneven and combined manner
• It is marked by temporary zones of relative stability and
instability linked to unequal capacities to displace or defer
basic contradictions, crisis-tendencies, and conflicts
• Associated STFs have mutually reinforcing set of structural,
institutional, and organizational forms, are key aspects of
competitiveness, and shape spatio-temporal rhythms
• Yet uneven development also disrupts established spatiotemporal fixes and associated identities, subjectivities,
modes of calculation, spatio-temporal horizons of action
Interim Summary - I
Neither world system nor VoC but
‘variegated capitalism’ – incomplete,
provisional, and unstable, economic
order based on the co-existence,
structural coupling, asymmetrical
influences, and co-evolution of
diverse, but dynamically compossible,
accumulation regimes and modes of
regulation as these exist in timeplace and/or in spatial flows
Interim Summary - II
• Coupling does is does not entail
a singular logic with unique
directionality at the global level–
it excludes it!
• Explore VarCap as a global
ecology evolving in the shadow
of one (or more) dominant
‘VoC’ with a distinctive logic
• Can also be applied fractally to
sub-global spaces (e.g.,, North
Atlantic, East Asia, EU) but note
world market as wider context
Global Shadow of Neo-Liberalism
Shadow results from the greater
influence of finance-dominated
accumulation in neo-liberal
economies, from the ‘ecological
dominance’ of such economies in
world market, from general place
of finance in global circuits, from
rolling out of specific forms of
competition law based on neoliberal view of market, and from
other, more geopolitical factors
The Shadow of Neo-Liberalism
• The shadow cast by neo-liberal market coordination results from
relative predominance of finance-led accumulation in neo-liberal
economies in world market and from place of financial capital
more generally in global circuits of capital
• Growing separation of financial from productive capital due to
pursuit of neo-liberalism on a global scale
• Dominance of financial capital reflects hyper-development of
factors linked to overall ecological dominance of capital
• But financial capital can’t escape constraints imposed by the
continued primacy of production within the overall circuit of
capital (to believe otherwise leads to financial fetishism)
EU in Shadow of Neo-Mercantilism
Shadow results from relative
weight of export-led growth in the
“Modell Deutschland”, from
‘ecological dominance’ of German
economic Grossraum in European
Economic Space, esp. Eurozone,
from institutional flaws in design of
Euro (cf. those in Bretton Woods),
and from Germany’s hegemonic
position in EU and wider EES
What about China as Number 2?
• Ecological dominance involves asymmetric
interdependence with negative and positive effects.
• Catastrophic symbiosis of US and PRC economies: US
over-consumption, Chinese overproduction.
• Cheap labour and cheap currency were initial basis of
Chinese export-led growth; moving from catch-up to
innovation-led growth.
• China’s trade-investment regime and inter-regional
competition leads TNCs to over-invest in China relative
to local/global absorption capacity
Chimerica
• Largest economic space in the world economy is
Chimerica, i.e., the structurally coupled, co-evolving
interdependence between neo-liberal US economy and
competition-led multi-spatial state corporatism of PRC
• Some have seen this as mutually beneficial benign but it
could also be seen as site of pathological codependence
• An interesting question is how long this relation can be
sustained before it becomes incompossible
• Similar analyses are possible for other international or
transnational relations (e.g., Chindia, Eurozone, CanadaUSA-Mexico, North East Asian regional integration)
And what, pray, is incompossibility...?
• Compossibility and incompossibility are key principles in
natural theology and critical realism alike:
Not everything that is possible is compossible
• Compossibility: different (sets of) social relations do or could
co-exist for a time in the same spatio-temporal matrix
• Incompossibility: (sets of) social relations that may exist
independently of each other in different spatio-temporal
matrices (based on theoretical first principles and/or on
empirical observation) cannot co-exist in the same matrix
• Both concepts must be studied relationally and over time:
allow for super- and subordination, complementarities, zones
of indifference, compensating cycles within larger periods.....
Modalities of Relational Compossibility
Impossible as Element
Incompossible
as set member
Benign/Neutral
Compossibility
(sustainable)
Possible as Element
Compossible
as set member
Incompossible
as set member
Pathological
Compossibility
(unsustainable)
Latent
Incompossibility
How to interpret this figure
• Not everything that is possible is compossible
• A set of elements that are individually possible viewed in
isolation and can be combined in a single possible world
in a given spatio-temporal matrix are compossible in this
regard (e.g., actually co-existing, relatively durable VoCs)
• A set of such elements that can’t be combined in a single
possible world in a given spatio-temporal matrix are
incompossible in this regard (empty cells in VoC grid)
• Some compossible sets comprise mainly complementary
elements and are stable/adaptive; others include major
contradictory elements that are destabilizing in long run
Variegated
world
market in
crisis. The
integration
of the world
market
generalizes
capital’s
contradictions
Conclusions
• Global crisis in variegated capitalism in world market
organized in shadow of neo-liberalism, with many
variations that are remaking uneven development
• In the EU, we are seeing a crisis of variegated capitalism
organized in the shadow of Modell Deutschland (which is
not a classic instance of neo-liberalism) but nonetheless
dependent for growth dynamic of world market
• There is pathological co-dependency of US and PRC in
world market (but no formal framework or regime); and
pathological compossibility of German model and Club
Med economies inside non-adaptive EU regime
References
Bryan, D. and Rafferty, M. (2006) Capitalism with Derivatives: a Political
Economy of Financial Derivatives, Capital and Class. Basingstoke: PalgraveMacmillan
Crotty, J. (1985) ‘The centrality of money, credit and financial intermediation
in Marx's crisis theory: an interpretation of Marx's methodology’, pp 4582, in S. Resnick and R. Wolff, eds, Rethinking Marx, Brooklyn: Autonomia
Minsky, H.P. (1986) Stabilizing an Unstable Economy, New Haven: Yale
University Press
Palley, T.I. (2009) A Theory of Minsky Super-Cycles and Financial Crises, IMK
Working Paper no. 11, Düsseldorf: Hans-Böckler Stiftung
Perez, C. (2002) Technological Revolutions and Financial Capital. The
Dynamics of Bubbles and Golden Ages, Cheltenham: Elgar.
Rasmus, J. (2010) Epic Recession, London: Pluto
Reinart, C. and Rogoff, K. (2008) This Time is Different: Eight Centuries of
Financial Folly, Princeton: Princeton University Press
The Chimera
• An animal with two or more different populations of
genetically distinct cells that originated in different
zygotes; each cell population keeps its own nature and
the resulting animal is a mixture of tissues.
• In Greek mythology, a chimera is a fire-breathing shemonster usually represented as a composite of a lion,
goat, and serpent.
• More generally, an imaginary monster made up of
grotesquely disparate parts
• This can be seen as a metaphor for variegated capitalism
in the world market