Page 190 - Global Political Economy_Understanding The International Economic Order

SYS TEMS O F POLI TICAL ECONO MY
determined by the timing of economic development. Whereas Great
Britain and the United States, as early industrializers, relied on capital
accumulation by entrepreneurs and by shareholders, Germany and
Japan as late starters emphasized accumulation by powerful banks,
and the USSR and China as late, late developing countries depended
on state-led capital accumulation.
A similar theme has been set forth by business economist Alfred
42
Chandler (1977) and other scholars. Each stage in the development
of technology, this position argues, requires new and appropriate in-
stitutional arrangements. In fact, national institutional and societal
restructuring is frequently necessary to take advantage of new tech-
nologies. 43 For example, it could be argued that the open and free-
wheeling American economy is appropriate for the age of the Internet.
Whether it is correct or not, this argument suggests that flexible and
adaptable economic and other institutions are desirable. Another for-
mulation of the evolving institutional requirements for economic suc-
cess has been set forth by Robert Wade in his argument that, whereas
the Japanese and East Asian economic model of state-led industrial-
ization and capital accumulation is appropriate for economic takeoff,
the American system of maximizing returns through the optimum al-
location of the existing capital stock and national savings may be
better suited to maintaining economic stability in an industrialized
economy. 44
Another approach to understanding superiority has been taken by
Jeffrey Hart in his book Rival Capitalists: International Competitive-
ness in the United States, Japan, and Western Europe (1992). He
argues that “variations in state-societal arrangements” determine the
success and international competitiveness of national economies. 45
And Peter Katzenstein has made a strong case for the superior perfor-
mance of corporatist small West European countries. 46 Although
these ideas provide useful insights into the relationship of national

42
Alfred D. Chandler Jr., The Visible Hand: The Managerial Revolution in American
Business (Cambridge: BelknapPress of Harvard University Press, 1977).
43
Carlotta Perez argues that an economy’s institutions must be tuned to the domi-
nant technologies of an era. See “Structural Change and Assimilation of New Technol-
ogies in the Economic and Social Systems,” Futures—The Journal of Forecasting and
Planning 15, no. 5 (October 1983): 357–75.
44
Robert Wade, “The Asian Debt-and-Development Crisis of 1997: Causes and
Consequences,” World Development 26, no. 8 (August 1998): 1535–53.
45
Jeffrey A. Hart, Rival Capitalists: International Competitiveness in the United
States, Japan, and Western Europe (Ithaca: Cornell University Press, 1992).
46
Peter Katzenstein, Small States in World Markets: Industrial Policy in Europe (Ith-
aca: Cornell University Press, 1985).
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