Regulatory capitalism suggests that the operation maintenance and development of the

international political economy International political economy (IPE) is the study of how politics shapes the global economy and how the global economy shapes politics. A key focus in IPE is on the power of different actors such as nation states, international organizations and ...

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 use for the purpose of obtaining profit. This socioeconomic system has developed historically through several stages and is defined by ...

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 ...

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 Deregulation is the process of removing or reducing state regulations, typically in the economic sphere. It is the repeal of governmental regulation of the economy. It became common in advanced industrial economies in the 1970s and 1980s, as a ...

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,

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 indust ...

casino capitalism An economic ideology is a set of views forming the basis of an ideology on how the economy should run. It differentiates itself from economic theory in being normative rather than just explanatory in its approach, whereas the aim of economic the ...

, developmental capitalism, risk capitalism,

state capitalism State capitalism is an economic system in which the state undertakes business and commercial economic activity and where the means of production are nationalized as state-owned enterprises (including the processes of capital accumulation, ...

and

crony capitalism Crony capitalism, sometimes also called simply cronyism, is a pejorative term used in political discourse to describe a situation in which businesses profit from a close relationship with state power, either through an anti-competitive regul ...

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, sometimes divided into the First Industrial Revolution and Second Industrial Revolution, was a transitional period of the global economy toward more widespread, efficient and stable manufacturing processes, succee ...

, and the global echoes of the French Revolution. Moreover, the crisis of the

interwar period In the history of the 20th century, the interwar period, also known as the interbellum (), lasted from 11 November 1918 to 1 September 1939 (20 years, 9 months, 21 days) – from the end of World War I (WWI) to the beginning of World War II ( ...

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.

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

Origins of regulatory capitalism

See also

References

Bibliography