Elective Course: Varieties of Capitalism

Since the economic and financial crisis of 2008-2013, there has been growing interest in the quality of institutions and economic systems. Which model is considered the best in the world? Which countries excel, and why? The aim of this course is to address these questions and explore the diverse capitalist systems. We will seek to understand why these systems vary significantly and identify their primary advantages and disadvantages. The course begins with a theoretical introduction to institutions and models of capitalism. In the second half, participants will study selected economic systems in Europe and other regions worldwide. The key takeaway is that no single model is universally applicable. Multiple approaches can be equally effective in generating wealth.

The economic and financial crisis of 2008-2013 sparked an intensified discussion about the quality of institutions and economic systems. One of the primary insights garnered from this crisis is that no single form of capitalism is universally superior; instead, there are multiple varieties. Some systems are more open and dynamic, effective in pioneering radical innovations, but they often come with the risk of significant imbalances and instability. Conversely, others are more rigid and conservative, offering resistance to crises. These might lag in introducing radical innovations and encounter challenges when restructuring but excel in production with a focus on quality and the incremental improvement of products. Regardless of the form, all can provide viable routes to prosperity.

The objective of this class is to delve into these diverse capitalist systems, grasping the reasons for their differences and pinpointing their core advantages and potential flaws. The course commences with a theoretical overview of institutions and capitalism models. In the subsequent portion, participants delve into specific economic systems prevalent in Europe and other global regions.

Number of hours: 30

1. Introduction into the seminar’s content. What’s wrong with economics? Traditional approach vs. evolutionary perspective. The problem of complexity. Sources: Arthur, Beinhocker; Casti.

2. What are institutions? Relations between institutions. Institutional change. Sources: North; Hodgson; Boyer; Ebbinghaus.

3. What institutions matter? The varieties of capitalism approach (VoC). Types of capitalism. Sources: Hall&Soskice; Djankov et. al.

4. The German “Rhine” capitalism (1). Ordoliberalism and the Social Market Economy. Sources: Clark, B.

5. The German “Rhine” capitalism (2). The third economic miracle 2005-2019. Presentations: 1. The German minimum wage. 2. The Volkswagen scandal. 3. The Agenda 2010 and the Hartz IV reforms

6. Capitalism of France; Source: Clark; Carney. Presentations: 1. Reform programs of Macron; 2. What is Dirigisme?

7. The Eurozone crisis and Varieties of Capitalism. Italy, Spain and Greece. Sources: Rojo; De Cecco; Bulow & Rogoff; Featherstone. Presentations on Greece, Italy, Spain: sources of crisis and the way to recovery

8. The U.S. Capitalism. Sources: Clark B.; O’Meara; Hall & Soskice. 1. How Apple was made? 2. The sources of economic crisis 2007

9. Japanese Capitalism. Sources: Clark B.; O’Meara; Yamamura; Hall & Soskice. Presentation: 1. The Japanese “lost decade” and Abenomics.

10. Economic System of China. Presentations: 1. Chinese labour market institutions

11. Written exam

12. Evaluation and discussion on the future of capitalism: Bitcoin, minimum guaranteed income, the platform economy.

1. Beinhocker, Eric D., The origin of wealth. Evolution, complexity and the radical remaking of economics, Business Book, London 2007. Chapter 1: A paradigm shift, p. 3-77.

2. Clark, B., The evolution of economic systems. Varieties of capitalism in the global economy, Oxford University Press, New York 2015.

3. North, Dogulass C., Institutional change: a framework for analysis, http://129.3.20.41/eps/eh/papers/9412/9412001.pdf

4. Hodgson, Goeffrey, What are institutions, Journal of economic issues, XL, March, 1/2006.

5. Boyer, Robert, Coherence, diversity and the evolution of capitalism: the institutional complementarity hypothesis, Discussion Papers 076, Interfaces for advanced economic analysis, Kyoto University, 2005.

6. Ebbinghaus, Bernhard, Can Path Dependence Explain Institutional Change? Two Approaches Applied to Welfare State Reform. MPIfG Discussion Paper. 2005, 2.

7. Djankov, Simeon: Edward L. Glaeser, Rafael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer, New comparative economics, NBER Working Papers, No. 9608, www.nber.org/papers/w9608

8. Hall, Peter A.; Soskice, David, An introduction to Varieties of Capitalism, in: Peter A. Hall, David Soskice, Varieties of Capitalism. The institutional foundations of Comparative Advantage. Cambridge, Berlin: Oxford University Press, 2001, pp. 1-70. www.oup.co.uk/pdf/0-19-924774-9.pdf

9. Streeck, Wolfgang, German capitalism: Does it exist? Can its survive? In: Colin Crouch and Wolfgang Streeck (eds.) Modern Capitalism or Modern Capitalisms?, London: Francis Pinter, 1995. http://www.mpifg.de/pu/mpifg_dp/dp95-5.pdf

10. Płóciennik, Sebastian, Germany’s Marriage to Austerity: Little Chance of a Quick Divorce, PISM Strategic File no. 17 (80): http://www.pism.pl/Publications/PISM-Strategic-Files/PISM-Strategic-File-no-17-80

11. Yamamura, Kozo, Streeck, Wolfgang, Convergence of diversity? Stability and change in German and Japanese Capitalism, in: Yamamura, Streeck, The end of diversity? Prospects for German and Japanese capitalism, Cornell University Press, Ithaca and London, 2003, p. 1-50.

12. O’Meara, Graeme, How the fundamentals of American and Japanese capitalism diverge. 2010. Unpublished.

13. Drahokoupil, Jan; Myant, Patrick, Putting comparative capitalism research in its place: Varieties of capitalism in transition economies, in: Vergleichende Kapitalismusforschung. Stand, Perspektiven, Kritik. Edited by Ian Bruff, Matthias Ebenau, Christian May, & Andreas Nölke. Westfälisches Dampfboot, 2012.

14. Płóciennik, Sebastian, Can Ukraine Mimic Poland’s Transition? The Limits of Its Latest Economic Changes, PISM Policy Paper no. 5 (107) 2015: http://www.pism.pl/Publications/PISM-Policy-Paper-no-107

15. Featherstone, Kevin, ‘Varieties of Capitalism’ and the Greek case: explaining the constraints on domestic reform?, The Hellenic Observatory, LSE, 2008. http://www.lse.ac.uk/europeanInstitute/research/hellenicObservatory/pdf/GreeSE/GreeSE11.pdf

16. De Cecco, Marcello, Italy's dysfunctional political economy, West European Politics, Vol. 30, No. 4, 763 – 783, September 2007.

17. Royo, Sebastian, Varieties of Capitalism in Spain: Business and the Politics of Coordination, European Journal of Industrial Relations, Vol. 13, No. 1, 2007, pp.47-65.

18. Karnia, Krystian, China’s capitalism, Warsaw Forum of Economic Sociology 3:1(5) Spring 2012, Warsaw School of Economics; Collegium of Socio-Economics; Department of Economic Sociology.

19. Mazumdar, Surajit, Indian Capitalism: A Case that doesn't Fit?, Munich Personal Repec Archive. MPRA Paper No. 28162, posted 19. January 2011

20. Witt, Michael A., China: what variety of capitalism, Insead Working Papers 2010.

21. Karadag Roy, Neoliberal Restructuring in Turkey. From State to Oligarchic Capitalism, MPIfG Discussion Paper 10/ 7, 2010.

22. Carney, Richard, Varieties of Capitalism in France: Interests, Institutions, and Finance, French Politics, 2006, 4.

23. Amable, Bruno, Diversity of modern capitalism, Oxford University Press, 2003.

24. Becker, Uwe, Open systemness and contested reference frames and change. A reformulation of the varieties of capitalism theory, Socio-Economic Review, No. 5, 2007, p. 261–286

25. Kochanowicz, Jan, The Polish economy and the evolution of dependency, in: J. Kochanowicz, Backwardness and Modernization. Poland and Eastern Europe in the 16th-20th centuries, Rulington 2006.

26. Campbell, John L., Pedersen, Ove K., Institutional competitiveness in the global economy: Denmark, the United States, and the varieties of capitalism, Regulation & Governance, No. 1, 2007, pp. 230–246.

27. Buchen, Clemens, East European Antipodes: Varieties of Capitalism in Estonia and Slovenia. Varieties of capitalism and hybrid success, Prepared for the Pre-Publication Conference “Varieties of Capitalism in Post-Communist Countries” at Paisley University on 23-24 September 2005.

28. Winiecki Jan, Determinants of Catching Up or Falling Behind: Interaction of Formal and Informal Institutions, Post-Communist Economies, Vol. 16, No. 2, June 2004.

Knowledge: theory and methodology of institutional economics, diversity of capitalist systems, transformation of economic systems

Skills: analysing changes in economic systems, preparing own analysis

Social competences: presenting own analyses, discussing evolution of economic systems

The final mark consists of five elements:

1) attendance: 1 absence allowed, each next is - 10 points

2) class activity, questions, participation in discussions: max. 20 points

3) presentation: max. 20 points

4) Written exam/essay: 55-90 points (mandatory)

Final mark

60-75 p. = 3,0-3,5

75-90 p. = 4,0-4,5

91 p. or more = 5