Embedding Twenty First Century Capitalism - Dr Margarita Gelepithis
It is an enduring premise in political economy that policymakers can foster public support for global capitalism by compensating citizens for the economic risks they face. As democracies attempt to build economies that are ecologically sustainable, they are grappling with the political consequences of new patterns of economic risk arising in the information age. This course explores how welfare states can be recalibrated to protect citizens from the new economic risks they face, fostering democratic support for twenty-first century capitalism. It is structured in three parts.
Part One introduces the concept of embeddedness that frames the course. We discuss Karl Polanyi’s warnings about the instability that ensues when labour is commodified and markets dis-embedded from society. We consider the post-WWII elite compromise known as ‘embedded liberalism’ whereby international trade was embedded in welfare state institutions. We discuss the ‘compensation thesis' linking welfare state generosity to public support for economic integration. We ask whether welfare states built in an industrial age increasingly fail to protect citizens from post-industrial risks, and how this mismatch can affect populism, protectionism, and anti-immigration sentiment.
Part Two explores current debates about the state’s role in providing economic security. We discuss first the idea of a universal basic income, before turning our attention to regional policy that targets state spending on left behind communities. We then examine the dominant ‘social investment’ approach, which aims not to de-commodify labour, but rather to provide citizens with the skills they need to compete successfully in the global economy. Finally, we explore the idea that well-regulated markets for credit and insurance can act as effective substitutes for tax-financed social protection.
Part Three concludes by asking whether such forms of social protection can help governments secure democratic support for a transition to ‘green growth’ or indeed ‘de-growth’. Can they underpin an ecologically sustainable form of capitalism, like post-WWII welfare states underpinned twentieth-century capitalism?