New Varieties of Capitalism
New Horizons in European Politics series
Chapter 1: Varieties of Capitalism and the crisis
In spite of having originated more than a decade ago, the Varieties of Capitalism (VoC) paradigm, which Hall and Soskice had introduced in their seminal work published in 2001, remains influential in the analysis of the global political economy. Since its original publication the VoC approach has been referred to by many scholars as a useful framework to categorise economic divergences. The VoC approach nevertheless also received much critical attention. The more critical accounts concentrated on the fact that the VoC approach essentially differentiates between liberal and coordinated economies on the basis of the variations in the corporate governance and the production model of firms in these economies. The critics have rightly pointed their finger at the weaknesses of Hall and Soskice's core argument, which is their relatively narrow emphasis on a corporate-based analysis. It considers companies as central actors in contemporary economies because of their role as 'key agents of adjustment in the face of technological change or international competition' (Hall and Soskice 2001: 6). Although the approach strongly emphasises the importance of the institutional background on which firms operate, it essentially neglects cultural aspects which are outside the 'competitive advantage' framework. The viability of companies is considered to be the main focus of economic policy-making. Policy-makers are hence reduced to the role of catalysts who have to find effective solutions on how to channel the pressures of globalisation in the right direction.