Table Of ContentEconomy and State
Economy and Society series
Nina Bandelj & Elizabeth Sowers, Economy and State
Bruce G. Carruthers & Laura Ariovich, Money and Credit
Miguel A. Centeno & Joseph N. Cohen, Global Capitalism
Economy and State
A Sociological Perspective
Nina Bandelj
and
Elizabeth Sowers
polity
Copyright © Nina Bandelj and Elizabeth Sowers 2010
The right of Nina Bandelj and Elizabeth Sowers to be identifi ed as Authors of this Work
has been asserted in accordance with the UK Copyright, Designs and Patents Act
1988.
First published in 2010 by Polity Press
Polity Press
65 Bridge Street
Cambridge CB2 1UR, UK
Polity Press
350 Main Street
Malden, MA 02148, USA
All rights reserved. Except for the quotation of short passages for the purpose of criticism
and review, no part of this publication may be reproduced, stored in a retrieval
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ISBN-13: 978-0-7456-4454-7
ISBN-13: 978-0-7456-4455-4 (pb)
A catalogue record for this book is available from the British Library.
Typeset in 11 on 13 pt Sabon
by Servis Filmsetting Ltd, Stockport, Cheshire
Printed and bound by MPG Books Group, UK
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Contents
Detailed contents vi
List of Illustrations ix
1 Introduction 1
2 Property: The State’s Role in Capitalist and Socialist
Economies 26
3 Money: The State’s Role in Monetary Policy,
Government Spending, and Taxation 56
4 Labor: The State’s Role in Redistribution and
Employment 84
5 Firms: The State’s Role in Business and Industry
Governance 110
6 Development: The State’s Role in Advancing
Economic Prosperity 137
7 International and Global Economy: The State’s Role
in Managing the Territorial Boundaries of Economic
Transactions 164
8 Conclusion 192
Glossary 204
References 211
Index 233
v
Detailed Contents
List of Illustrations ix
1 Introduction 1
What is Economy? 3
What is State? 8
Conceptualizing Economy–State Relations 12
Economy–state dualism 13
Economy–state embeddedness 18
Overview of the Book 24
2 Property: The State’s Role in Capitalist and Socialist
Economies 26
Classical Perspectives on Capitalism 27
Smith and Ricardo 27
Marx and Weber 28
Central Institutions of Capitalism 31
Varieties of Capitalism 38
Socialist Economies 40
The Transformation of Soviet State Socialism 44
Chinese Socialism and Beyond 49
Conclusion 53
vi
Detailed Contents
3 Money: The State’s Role in Monetary Policy,
Government Spending, and Taxation 56
Money, Money, Money 57
Monetary Policy 60
Fiscal Policy 66
Government spending 67
Taxation 70
The social consequences of tax policy 75
The State’s Enforcement of Debtor–Creditor Relations 76
The Prominence of Finance 78
Conclusion 82
4 Labor: The State’s Role in Redistribution and
Employment 84
Resisting Labor Commodifi cation 85
Welfare States: The Provision of Social Rights 87
What determines welfare state expenditure 91
The consequences of welfare provision 96
Challenges to the welfare state 97
The role of employers 99
Labor Market Regulations 101
Labor Market Participation 104
Imprisonment and the economy 104
Immigrant labor 105
Employment in the informal economy 107
Conclusion 108
5 Firms: The State’s Role in Business and Industry
Governance 110
The Firm and the Law 111
Small Firms, Big Firms 113
The Organization of Firms 115
Corporate Governance 119
Inter-F irm Relations 121
Industrial Policy 124
Research and Technology 126
Business Regulation to Protect Consumers 130
vii
Detailed Contents
Business Regulation to Protect the Environment 133
Conclusion 135
6 Development: The State’s Role in Advancing
Economic Prosperity 137
Modernization Theory 139
Dependency Theory 142
The World- Systems Perspective 144
The Neoclassical Approach to Economic Development 147
The Comparative Institutional Approach 149
Late Industrialization and Developmental States 151
Ideas and Economic Development 158
Conclusion 161
7 International and Global Economy: The State’s Role
in Managing the Territorial Boundaries of Economic
Transactions 164
International Trade and its Regulation 165
Trade protectionism 165
Regional and global trade governance institutions 167
The State’s Role in Foreign Direct Investment 170
The rise of multinational corporations and their
consequences 171
The “race to the bottom” 173
The Financialization of the Global Economy 175
Neoliberalism and the Washington Consensus 177
Nation-S tates’ Role in the Global Era 184
Whither the state on the global stage? 184
States still matter a great deal 187
Not whether but how states matter in the global
economy 188
Conclusion 190
8 Conclusion 192
Glossary 204
References 211
viii
List of Illustrations
Boxes
Box 1.1 J ohn Maynard Keynes’s boom and bust cycle of
infl uence 16
Box 2.1 K arl Polanyi and the role of the state in
construction of markets 34
Box 3.1 What’s the Fed got to do with you? 62
Box 4.1 What is a welfare state? 90
Box 5.1 The rise of corporations 114
Box 6.1 Embedded autonomy 155
Box 7.1 The failure of the Washington Consensus 181
Figures
Figure 1.1 Membership in the United Nations over time 10
Figure 1.2 The infl uence of state on economy 22
Figure 1.3 T he infl uence of social forces on state decisions
about economy 23
Figure 3.1 Interest rate fl uctuations in the US, 1955–2008 64
Figure 3.2 G overnment expenditure on the military,
education, and health, 2004 (%) 69
Figure 3.3 Financialization of the US economy 79
Figure 4.1 S ocial expenditure as a percentage of GDP,
2005 92
ix
