The Heterogeneity of Capitalism in Crisis-Ridden Europe

Abstract:

To get a realist picture of the economic crisis in Europe, we need to know the heterogeneity of European capitalism. Differences in terms of competitiveness and institutions are huge. With the crisis as point of departure, I will outline this heterogeneity. First, I describe the comparative (dis-)advantages of selected EU-member states. The differences are big, particularly in terms of economic specialisation and innovation capacity—aspects getting little attention in the standard literature. In the second part, the paper concentrates on institutional development in the past decades. To identify gradual differences and change, I distinguish ideal-typical from empirical capitalisms, which are located in the field between the types. Based on state–economy and capital–labour relationships as criteria, my types are liberal and embedded capitalism of which the latter is split into statist, patrimonial and corporatist types. Data from the Index of Economic Freedom, the OECD and the World Bank are rough indicators to locate the cases, but show that the strongly corporatist capitalisms in the Nordic countries are highly competitive, while competitiveness and the capacity adequately to act declines the more patrimonial capitalism is, as in the Mediterranean countries.

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