Mark Vail casts his thoughts on Recasting Welfare Capitalism

My approach to writing Recasting Welfare Capitalism was grounded in my doctoral training but was also shaped by many subsequent developments in both my own perspective and in Europe and the wider advanced industrial world.  As a doctoral student at Berkeley and as a comparative political economist from the historical-institutionalist tradition, I was steeped in the post-war literature on so-called “national models” of capitalism.  Authors like Andrew Shonfield in the 1960s, Peter Hall, Suzanne Berger, and Peter Katzenstein in the 1980s, and Hall and David Soskice in their work on “Varieties of Capitalism” in the early 2000s, showed us that all capitalism was not of a piece; instead, each European country (as well as the United States) had responded to the challenges of post-war reconstruction and political and economic development by creating political-economic orders that were admixtures of tradition and innovation, informed by historical experience but subject to significant innovation in ways that allowed them to confront a series of new and daunting challenges.

This literature was absolutely foundational; it generated a number of critical insights about how national capitalisms work and, perhaps even more importantly, why what Berger and Ronald Dore called “National Diversity” was likely to endure, even in a context of “Global Capitalism.”  At the same time, as I worked on Recasting Welfare Capitalism, I was continually struck by the fact that some aspects of the portraits of post-war France and Germany left to us by outstanding scholars as Hall and Berger failed to capture more recent dynamics in the French and German economic and, even more so, political orders (this was hardly surprising—after all, more than two decades had passed and the era of globalization and liberalization had wrought significant changes across the advanced industrial world).  How was I to explain that a France that so many had portrayed as “statist,” governed from the top down by a narrow and opaque élite, was now characterized by ongoing battles between governments and interest groups in which no single actor seemed to be taking the lead?  Likewise, how was I to explain that a German state long described as “semi-sovereign,” to use Katzenstein’s formulation, now seemed to be anything but, taking the lead in driving some of the most controversial economic reforms since the immediate post-war period?  As I began to hone Recasting into a coherent manuscript, I sought to provide some answers to these questions, to situate the seminal scholarship of my mentors in a more contemporary and fraught context and to bring my work on French and German politics to bear on perhaps one of the most important “big” questions of our day—how does capitalism change, and why?

In this way, Recasting was not merely a response to internal academic debates; it was also a response to a world which had changed enormously since the 1980s.  The book shows, not only that capitalism changes as the international economic context evolves, but also that the political responses to those developments change over time, driven by shifting relationships among the state and interest groups.  This dynamic approach to understanding the development of capitalism, of course, became even more critical with the advent of the international financial crisis of 2007 and 2008 and the broader international economic crisis that followed in its wake.  The crisis destabilized many earlier assumptions about the dynamics of “modern capitalism” (to borrow Shonfield’s earlier formulation) and shattered others, particularly the notion that it can be created and then, in quasi-Deist fashion, left to run itself.  Politics is always at the heart of capitalist economies, and conceptions resting on apolitical understandings of a neutral market of rational, self-interested individuals are unhelpful and even dangerous, to the extent that they distract us from the critical questions of political responsibility and enlightened public policy which we ignore at our peril.  So, Recasting grew out of one world and set of concerns and into another—unwittingly, unintentionally, but, I hope, in ways that demonstrate its continued relevance.  Responses to the crisis also bolster one of the book’s other central, if sometimes implicit, claims—that capitalism’s development is likely to continue to be national as much as transnational, calling into question narratives, prevalent in the 1990s, of an “ever-closer” European Union or a gradually but inexorably homogenizing world of along the lines of an Anglo-American world of free markets and minimal states.

Recasting Welfare Capitalism by Mark Vail is now aviable from Temple University Press.

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