by Tarik Hamdam*
Reviewed by Matheus Lucas Hebling
In light of the many political- economic turbulences the world has been facing—such as the crisis of globalization triggered by COVID-19 and numerous international conflicts—it is imperative for social scientists, in the broadest sense, to understand the variety of perspectives and theories available for interpreting the contemporary world. This is the main premise of the book Political Economy: Comparative, International, and Historical Perspectives (2022), by Christian May, Daniel Mertens, Andreas Nölke, and Michael Schedelik.
Based on an introductory course taught at Goethe University Frankfurt and Osnabrück University, the book introduces political economy through three main approaches: Comparative Political Economy (CPE), International Political Economy (IPE), and Historical Political Economy (HPE).
CPE examines the varied organizational forms of capitalism shaped by national institutions, IPE explores transnational economic processes and institutions, and HPE focuses on the historical evolution of political and economic systems. Despite these differing approaches, the authors follow Polanyi’s (2021) view that the economy is always embedded in the social sphere. Thus, political economy analyzes how political processes shape and influence distributional conflicts and inequalities.
The first part of the book outlines the origins of CPE. Over the last two decades, the Comparative Capitalism field has been shaped by the “Varieties of Capitalism” (VoC) framework, developed by Hall and Soskice. They challenged the idea of convergence towards a liberal capitalist model, arguing that distinct institutional arrangements lead to different economic systems. Firms, the key actors in any economy, develop capabilities through relationships with stakeholders. Institutions evolve to address coordination challenges across five key areas: corporate governance, industrial relations, training, interfirm relations, and employer-employee relations.
According to this framework, two main types of capitalism emerge based on the characteristics of these institutions: Coordinated Market Economies (CMEs), exemplified by the German model, and Liberal Market Economies (LMEs), represented by the United States. The German model relies on non-market forms of coordination both among firms and between employers and employees such as negotiation and collective agreement, whereas the U.S. model depends primarily on market mechanisms.
May et. al. acknowledge that, while the Varieties of Capitalism (VoC) framework represents a significant effort to account for institutional diversity within capitalism, it has been subject to several criticisms. These include its limited theorization of institutional change, the absence of a clear political dimension, the neglect of conflict and social struggle, an overly narrow focus on the national scale, and its emphasis on high-income countries. Many of these critiques have been addressed by the second generation of comparative capitalism scholarship, which, in addition to the supply-side institutions emphasized by VoC, has also theorized demand-side institutions, giving rise to what is known as Growth Models theory.
Drawing on post-Keynesian perspectives, Growth Models theory argues that firms invest and produce only when there is sufficient demand for their goods and services. Consequently, identifying the key drivers of economic growth becomes essential. For instance, Germany is commonly characterized as an export-led growth model, whereas the United Kingdom and the United States rely on consumption-led models driven more by debt than by wages. By contrast, some emerging economies exhibit investment-led growth patterns. Although growth models tend to be relatively stable institutional configurations, they depend on both international conditions and domestic political support, the latter often rooted in specific social coalitions.
The second part of the book covers International Political Economy (IPE) theory, which emerged in the 1970s and is divided into three main approaches: liberal, realist, and Marxist. Unlike Comparative Political Economy (CPE), IPE focuses on transnational relations in politics and economics, especially the formation of international institutions. The liberal view, influenced by Adam Smith and David Ricardo, highlights how multinational corporations and free trade foster cooperation between nations. Realists emphasize conflict, with states prioritizing autonomy and trade surpluses for security. The Marxist approach, led by thinkers like Immanuel Wallerstein, stresses global inequality through class exploitation and capital accumulation.
However, the book’s authors note that these three theories often present a clear separation between CPE and IPE. In response, they advocate for a middle-ground approach that integrates both perspectives, enabling a better understanding of how the international order constrains countries while recognizing how national variations of capitalism shape specific outcomes.
The final theory discussed is Historical Political Economy (HPE). Unlike the synchronic perspective of CPE, HPE focuses on how institutions are built and dismantled over time. Within this approach, there are two main perspectives: one emphasizes a linear understanding of history, such as modernization theory, and theories centered on the trend toward global economic globalization. The second perspective takes a cyclical view of history. The book emphasizes the latter, as IPE analysis suggests that the capitalist system is characterized by cycles of growth and decline, making it crucial to identify parallels between different phases over time.
The main theories discussed in the book are Business Cycle theories, Regulation Theory, World Political Cycles of Hegemony, Neo-Gramscian periodizations, and Social Structures of Accumulation. Despite the range of theories, the central goal is to examine how institutions emerge to manage capitalist accumulation patterns and how they transform over time. This suggests that capitalism not only evolves in its functioning but also shifts its dynamic center, such as moving from England to the United States, and possibly to China in the future.
At the end of the book, the authors speculate about the future of the global economy through the lens of Polanyi’s theory of the double movement. This theory describes the cyclical expansion of markets (the “improvement movement”) and their subsequent re-embedding within social structures (the “habitation movement”). The authors argue that, following the neoliberal era that began in the 1980s, we are now entering another habitation phase, in which societies seek to regulate market forces. Indicators of this shift include the rise of state-led capitalisms in China and India, the return of protectionist policies in Europe and the United States, and the emergence of far-right movements that mobilize against market commodification.
In light of this new trend, it is ultimately up to social movements and citizens to determine what kind of re-embedding will prevail. One possible path points toward a more inclusive model, grounded in post-Keynesian insights and in institutions that enable the revival of trade unions and other social movement networks as pillars of social protection. The alternative trajectory, however, entails a far-right, exclusionary, and hierarchical mode of social organization, which likewise depends on the construction of new institutions rooted in non-liberal values.
References
May, Christian, Daniel Mertens, Andreas Nölke, e Michael Schedelik. Political economy: comparative, international, and historical perspectives. Springer, 2024.
* Tarik Dias Hamdam is a PhD candidate in Sociology at the Graduate Program in Sociology and Anthropology (PPGSA/UFRJ) at the Federal University of Rio de Janeiro. He holds a Bachelor’s degree in Social Sciences and a Master’s degree in Sociology from the same institution. During his doctoral studies, he was a visiting researcher at Ruhr University in Germany. He has worked as a Sociology lecturer at the Federal University of Rio de Janeiro and currently teaches in the Cultural Education and Popular Education Project (PECEP). He is a member of the Development, Work, and Environment Research Group (DTA). His main research interests include the Sociology of Work and Economic Sociology, with a focus on trade unionism and collective action. His current research investigates trade union strategies in the automotive sector. E-mail address: hamdan.tarik@gmail.com
