Regulatory capitalism
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Regulatory capitalism suggests that the operation maintenance and development of the international political economy increasingly depends on administrative rules outside the legislatures and the courts. In other words, it tells us that
capitalism Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, priva ...
is a regulatory institution – one that is being constituted, shaped, constrained and expanded as a historically woven patchwork of regulatory institutions, strategies, and functions. Although this patchwork varies widely across regions, nations, regimes, sectors, issues, and arenas, the general trend despite and beyond the process of
liberalization Liberalization or liberalisation (British English) is a broad term that refers to the practice of making laws, systems, or opinions less severe, usually in the sense of eliminating certain government regulations or restrictions. The term is used m ...
is that of growth rather than decline of the role
regulation Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. Fo ...
in shaping policy and politics. Regulatory capitalism claims that the capitalist system was built, cultivated, and controlled by regulation and that demand for regulation is in fact generated by capitalism. Deregulation may represent trends in some industries (notably finance), but more regulation is the general trend beyond that characterize modern and post-modern capitalism alike. Regulation, which refers to rule making and rule enforcement, is in this interpretation an instrument of organizations—states, business, civil and hybrid and is carried at all political arenas and levels. The concept of regulatory capitalism serves as an alternative to concepts like
financial capitalism Finance capitalism or financial capitalism is the subordination of processes of production to the accumulation of money profits in a financial system. Financial capitalism is thus a form of capitalism where the intermediation of saving to inves ...
,
welfare capitalism Welfare capitalism is capitalism that includes social welfare policies and/or the practice of businesses providing welfare services to their employees. Welfare capitalism in this second sense, or industrial paternalism, was centered on industrie ...
, casino capitalism, developmental capitalism, risk capitalism,
state capitalism State capitalism is an economic system in which the state undertakes business and commercial (i.e. for-profit) economic activity and where the means of production are nationalized as state-owned enterprises (including the processes of capital ...
and
crony capitalism Crony capitalism, sometimes called cronyism, is an economic system in which businesses thrive not as a result of free enterprise, but rather as a return on money amassed through collusion between a business class and the political class. This i ...
in an attempt to shed more light on capitalism as a polymorphous order. It builds on and extends the observations on the rise of a particular form of state–the regulatory state–and social governance via rule making, rule monitoring and rule enforcement.


Origins of regulatory capitalism

When looking for the origins of regulatory capitalism, the development of capitalism as an order of economic allocation has to be first studied. The maturity of capitalism in this sense was reached during the nineteenth century. The main factors that contributed to its expansion include British hegemony in the nineteenth century, the social and economic implications of the
Industrial Revolution The Industrial Revolution was the transition to new manufacturing processes in Great Britain, continental Europe, and the United States, that occurred during the period from around 1760 to about 1820–1840. This transition included going f ...
, and the global echoes of the
French Revolution The French Revolution ( ) was a period of radical political and societal change in France that began with the Estates General of 1789 and ended with the formation of the French Consulate in coup of 18 Brumaire, November 1799. Many of its ...
. Moreover, the crisis of the interwar period as well as the process of democratic enfranchisement enabled a shift towards an increased role of the state, which in many domains took over two major functions of governance previously dominated by business – steering (leading, thinking, directing, guiding) and rowing (enterprise, service provision). In regulatory capitalism, the role of steering is occupied by the state, while the functions of service provision and technological innovation are performed by business. In the 1990s it became more evident that while the state attempted to get rid of running things, it started to regulate more of them instead. At the same time, the regulation expenses of the state soared, incentivising the analysts to talk about the state as a regulatory state. Moreover, many non-state actors, particularly the executive actors beyond the state, started to regulate other organizations more. The term 'regulatory society' was developed. Some researchers pointed out that the markets had become more vibrant at the same time as the regulation of the markets increased. That led to the creation of the term 'regulatory capitalism', which connected the terms 'regulatory state' and 'regulatory society' to the simultaneous rapid development of the capitalist system. One of the first books that attempted to capture how the regulatory capitalism globalized through a variety of mechanisms such as modelling was the book Global Business Regulation by Braithwaite and Drahos, published in 2000.


See also

* Economic interventionism *
Mixed economy A mixed economy is variously defined as an economic system blending elements of a market economy with elements of a planned economy, markets with state interventionism, or private enterprise with public enterprise. Common to all mixed economie ...
*
Regulated market A regulated market (RM) or coordinated market is an idealized system where the government or other organizations oversee the market, control the forces of supply and demand, and to some extent regulate the market actions. This can include tasks s ...
*
Regulatory capture In politics, regulatory capture (also agency capture and client politics) is a form of corruption of authority that occurs when a political entity, policymaker, or regulator is co-opted to serve the commercial, ideological, or political interests ...
*
Regulatory economics Regulatory economics is the economics of regulation. It is the application of law by government or regulatory agencies for various purposes, including remedying market failure, protecting the environment and economic management. Regulation Regu ...
* Regulatory state *
Social democracy Social democracy is a political, social, and economic philosophy within socialism that supports political and economic democracy. As a policy regime, it is described by academics as advocating economic and social interventions to promote s ...


References


Bibliography

* David Levi-Faur and Jacint Jordana Eds, ''The Rise of Regulatory Capitalism: The Global Diffusion of a New Order'', The Annals of the American Academy of Political and Social Science Series. * J. Braithwaite, ''Regulatory Capitalism: How it Works, Ideas for Making it Work Better'', Cheltenham, Edward Elgar, 2008. Capitalism Sociology of law Political science Economic globalization Public administration Economics of regulation {{globalization-stub