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About this book

This new textbook provides an authoritative analysis of Comparative Political Economy and how it can help us to understand the global capitalist marketplace in the 21st century in all its variant forms. The author provides broad-ranging empirical examples throughout and relates classical concerns to current international affairs.

Table of Contents

Chapter 1. Introduction: The Focus and Rationale of the Book

Abstract
After the fall of the Berlin Wall in 1989 and the collapse of communism, the triumphalist proclamation by the influential liberal theorist Fukuyama of the ‘end of history’ suggested that the historic dichotomy — between ordering society according to capitalist principles (privateownership and the primacy of market mechanisms) and ordering society according to communist principles (from each according to means, to each according to needs) — had been resolved. Francis Fukuyama argued that 1989 marked ‘the total exhaustion of viable systemic alternatives to Western liberalism’. He saw no more ‘fundamental contradictions in human life that cannot be resolved in the context of modern liberalism’, hence the ‘end of history as such: that is, the end point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government’ (1989: 3–8). Or as Dr Pangloss in Voltaire’s Candide would have it, ‘all is for the best in the best of all possible worlds’.
Ben Clift

Chapter 2. Comparative Political Economy: Lineages from Classical Political Economy, Linkages to International Political Economy

Abstract
This chapter sets out the approach of this book, and distils the essence of the political economy tradition into a series of core insights which underpin and animate the CPE analysis offered here. I highlight how the pre-disciplinary character of classical political economy is a key reason why it engaged in holistic, integrated analysis of political economy and is an important source of its insights. From a contemporary standpoint, when the dominant social scientific disciplines have been shaping our views and structuring our interpretations of the political economic world for a century and more, it is not easy to rediscover such a pre-disciplinary mindset. Nevertheless, as I will argue in this chapter, the attempt to do so repays the intellectual investment required. This book’s approach to political economy is also informed by the combined insights of recent developments in CPE and the IPE literature, and assumes that dialogue between the two areas of the political economy canon can help to advance understanding in each area. For this reason, the final section sets out how the conversation between CPE and IPE can best be approached to improve the prospects of fruitful cross-fertilization.
Ben Clift

Chapter 3. Capitalism and Classical Political Economy

Abstract
In Chapters 1 and 2 I argued that a return to the insights, ideas, concepts, theories and arguments of classical political economy is an extremely instructive launch-pad for an exploration of contemporary CPE. We will engage with the classical political economy tradition in order to discover more about how to think like a political economist and how to study political economy comparatively. We will encounter three schools of classical political economic thought in this chapter — liberal (focusing on Smith, but also on the political economist, parliamentarian and financier David Ricardo), radical (Marx) and economic nationalist (List), each understanding the nature and source of wealth differently. I will offer only a brief summary of some of their most important insights and standpoints from which to analyse capitalism, taking care to avoid some of the crude caricatures of their positions sometimes found in the literature.
Ben Clift

Chapter 4. Disciplinary Politics and the Genealogy of Comparative Political Economy

Abstract
We have seen in Chapters 1 to 3 how getting to grips with the historical evolution of political economic thought is important for learning how to think like a political economist. Appreciation of this lineage, we noted in Chapter 1, explains the significant differences between political economy and economics. In this chapter we will develop this theme further as we introduce more analytical tools required to understand and interpret contemporary state/market relations by exploring the important issue of how to engage in CPE analysis. We will unearth disagreements about method and the merits of simplifying assumptions, abstract modelling and generalization in political economy. This divided Ricardo and Malthus almost two centuries ago, divisions which continue within contemporary CPE (see Chapter 12). These debates have been going on long enough for us to be confident that there is merit on both sides and that there is no imminent prospect of resolution.
Ben Clift

Chapter 5. Institutional Analysis and Comparative Political Economy

Abstract
The study of political institutions is as old as the study of politics. Within political science the focus on institutions was revived by ‘new institutionalism’ (Peters 1999) in the 1980s and 1990s. Within CPE, comparative institutional analysis of capitalism has long been a mainstay of the discipline (see e.g. Shonfield 1965). Spelling out how capitalist evolution becomes channelled along particular paths of development is the central contribution of institutionalist CPE. The comparative dimension enables appreciation of the nationally differentiated paths of institutional development, and the dynamics and implications of their attendant configurations of institutions.
Ben Clift

Chapter 6. Interest-based Analysis and Comparative Political Economy

Abstract
One way to explain outcomes in CPE is through the interests of political economic actors, which sees self-interest and egoism, as opposed to altruism, as the driving motivations behind political economic activity and behaviour. Thus in any given situation, presented with any given choice, actors will ask: ‘What is in it for me?’ The celebrated political economist Susan Strange was an exemplar of a particular type of interest-based approach to political economy, beginning with the question: cui bono? (Latin for ‘Who benefits?’). Her conviction was that the key to answering this question lies in understanding power relations (Strange 1994a: 136, 234; Tooze and May 2002: 7; see also Lasswell 1936).
Ben Clift

Chapter 7. Ideational Analysis and Comparative Political Economy

Abstract
In this chapter I explore the ideational element within CPE analysis and consider different theoretical approaches to the problem of how to factor ideas and shifts in prevailing understandings of political economic wisdom into the study of political economy. Max Weber was an important forebear of this kind of political economy analysis, introducing the concept of Verstehen, or how economic actors understand their environment. His work explained political economy in terms of individual action and perception, noting that understandings of economic rationality can vary (Weber 1978 [1922]; Swedberg 1998: 36). Building on these foundations, I will underline how shared understandings of, among others, markets, the state and capitalism all shape how political economic change is enacted. These have been important foundations for the ‘ideational turn’ in political economy.
Ben Clift

Chapter 8. The Comparative Political Economy of the State

Abstract
Conceptualizing and analysing the relationship between state and market is arguably political economy’s most important contribution to social science. A focus on ‘states and markets’ captures the substantive essence of political economy as a field of study. Many of the most interesting analytical debates and controversies within CPE have focused on the trajectory, fate and potentialities of the nation state within a changing global political economy. However, while all agree that a focus on states and markets is central to political economy, there are widely differing normative positions on, and understandings of the nature of, their complex relationship.
Ben Clift

Chapter 9. Comparative Capitalisms

Abstract
We encountered the Varieties of Capitalism (VoC) (Hall and Soskice 2001) approach to comparative capitalisms in Chapter 5 when discussing institutions and CPE. In this chapter we return to this theme, which has become so pervasive and dominant within CPE that VoC has been criticized for falling short of providing a unifying theory of everything for the study of comparative capitalisms. As more sympathetic scholars note (Hancké et al. 2007; Hancké 2009), this is all rather unfair as it never claimed to be anything so all-encompassing. Notably, VoC may not offer the same explanatory purchase over the emerging market economies and the rising 21st-century economic powers — the BRICS. A ‘VoC of the BRICS’ research programme has not developed, and this may be for good reasons. What VoC can do, however, is provide a useful and potentially revealing starting point for the comparative analysis, interpretation and interrogation of processes of capitalist restructuring in the advanced economies.
Ben Clift

Chapter 10. The Comparative Political Economy of Finance and Corporate Governance

Abstract
The market and the firm are two of the central institutions of capitalism. Building on the discussion of comparative capitalisms in Chapter 9, and the state in Chapter 8, in this chapter I analyse the CPE of finance through an exploration of the interconnected developments of financial markets (at both national and international levels) and firms. Analysis underlines how both markets and firms are political constructs. It is not ‘the market’ per se which shapes how firms and how capitalism evolves in a given context. Instead, primacy in explanation goes to political processes of market-making, notably inscription of the rights and responsibilities of firms (and the actors within them) into the legislative and regulatory environment. These determine what the company is, how it operates, and crucially how it is financed and its relationship to its financiers.
Ben Clift

Chapter 11. The Comparative Political Economy of Welfare

Abstract
One of the biggest changes in the nature of capitalism within the advanced affluent democracies during the 20th century was the extension in the scope and scale of social welfare provision. In this chapter I explore the CPE of welfare regime restructuring and how to understand the relationship between capitalism, inequality and the social order in the contemporary global context. I consider the changing international context of advanced welfare states and interrogate the relationship between welfare and capitalism, and between globalization and the welfare state, arguing that the strictures imposed on welfare states by international capital mobility can be overstated. That is not to say that welfare provision is not under real and arguably increasing political and economic pressures, but a wide array of CPE research indicates that these are more endogenous, domestic and demographic than exogenous and international.
Ben Clift

Chapter 12. The Comparative Method and Comparative Political Economy

Abstract
The comparative element within CPE provides both the definitional boundaries of the sub-field and the core analytical resource which generates many of its most important insights. Comparative analysis can help us build knowledge in a number of ways. First, it can provide contextual description of other political economies, thus expanding our understanding of the political economy. As the eminent comparative political scientist Seymour Martin Lipset put it, ‘without examining social relations in different countries it is impossible to know to what extent a given factor actually has the effect attributed to it in a single country’ (1963: 9–10). Second, comparative analysis can contribute to classification and the development of typologies, such as the varieties of capitalism explored in Chapter 9, or the welfare state ‘families’ in Chapter 11. These help us understand, explain and interpret broader political economic processes. In this way, comparing helps us develop new theories about political economy, or refine concepts which are the building blocks of these theories. The process of comparative analysis also helps us refine the concepts we use when analysing politics, by seeing how applicable they are in other contexts. This improves our clarity and explanation of politics and political economy. Third, comparative analysis enables us to verify or falsify theories.
Ben Clift

Chapter 13. Conclusion

Abstract
In this book my central contention has been that a deepened understanding of contemporary capitalism is best founded on a thorough appreciation of the classical political economy progenitors of modern CPE. The chapters have explored key areas of substantive focus for CPE, such as the state, models of capitalism, finance and welfare. Along the way we have encountered and deployed many of the key insights of a rich lineage of influential thinkers, including Smith, Marx, List, Weber, Hayek, Keynes and Polanyi.
Ben Clift
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