Political Economy I: Capitalism and Democracy Central European University Department of Political Science 2 Year MA Program, Fall Semester 2014/2015 2 CEU credits, 4 ECTS credits Instructor: Dorothee Bohle Time and Place: Wednesdays, 15.30-17.10, FT 908 Office hours: Mondays 13.30-17.30 Content The course introduces some of the core theories and key concepts in political economy by focusing on the uneasy relationship between capitalism and democracy. The course will ask a number of big questions about politics and economics, such as: Under which conditions is capitalism compatible with democracy? How does the disproportionate power of business affect democracy? Which are the relative strengths and weaknesses of politics versus markets in bringing about economic growth and socioeconomic equality? How does economic globalization and European integration affect democracy? In order to address these and similar questions, the course will review liberal, Marxist, sociological and institutional approaches, and draw on the experiences of European capitalist democracies, East and West. Learning outcomes At the end of the course, students will have acquired a basic understanding of some core theories and key concepts in, as well as selected approaches to political economy. The course enhances critical thinking and multidisciplinary orientation, and contributes to the mastery of academic writing and oral skills. Learning outcomes are supported by the course s requirements and assessed accordingly. Course requirements and evaluation: 1. Attendance and in-class participation. Each session will consist of a lecture followed by a class discussion. Attendance and participation in the discussion are crucial (20 % of the grade). 2. Three position papers. Position papers are small essays on the weekly readings. They should shortly summarize the readings, reflect on the major arguments, and include questions for further discussion. Position papers can compare the readings to other readings of the class, or apply the readings to an empirical
case. The papers should be 4-5 pages long, and are to be distributed electronically to the whole class latest by noon the day prior to the class (Moodle). Students might be asked to shortly present their papers in class (20 % of the grade). Late work will not be accepted (40 % of the grade). 3. Short questions. Students who do not submit a position paper in a given week, are required to submit three short questions on the weekly reading (8 x 3 questions all in all). The questions have to be submitted electronically latest by noon the day prior to the class (Moodle). Late work will not be accepted (10% of the grade). 4. One review paper of ca. 2000-2500 words. Students are required to choose one topic of the course, identify a major work associated with the topic, and review it critically. The work can be a monograph, special journal issue, or edited book, and students can chose from the recommended literature or come up with their own suggestions. The topic and book has to be agreed upon with the instructor. A critical review is more than a simple summary. It should a) embed the work in the broader debate, b) identify its major arguments, findings, and methods, c) and critically evaluate its merits, shortcomings and contributions to the debate. Students are required to consult at least 3 additional sources (journal articles or books) when completing their review. (30 % of the grade) Topics and Readings WEEK 1: INTRODUCTION Gabriel Almond. Capitalism and Democracy. PS: Political Science and Politics Vol. 24, No. 3, pp. 464-477 WEEK 2: HOW DID EUROPE DEMOCRATIZE? (CLASSICS) *Bernhard, Michael. The Moore Thesis: What s Left after 1989? In 101st. Annual Meeting of the American Political Science Association (APSA), Washington, DC, 2005. http://www.clas.ufl.edu/users/bernhard/content/moorethesis6.pdf.
Recommended: Moore, Barrington. Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making of the Modern World. Reprint edition. Boston: Beacon Press, 1993.(esp. part three, theoretical implications, pp. 413-508) Huber, Evelyne, Dietrich Rueschemeyer, and John D. Stephens. The Impact of Economic Development on Democracy. The Journal of Economic Perspectives 7, no. 3 (July 1, 1993): 71 86. Therborn, Goran: The Rule of Capital and the Rise of Democracy, New Left Review 103:3-41. WEEK 3: HOW DID EUROPE DEMOCRATIZE (RECENT APPROACHES) *Ziblatt, Daniel. How Did Europe Democratize? World Politics 58, no. 2 (2006): 311 38. doi:10.1353/wp.2006.0028. Recommended: Acemoglu Daron and and James A. Robinson. The Economic Origins of Dictatorship and Democracy. Cambridge: Cambridge University Press, 2006, pp. 15-46 (The Argument). Boix, Charles. Democracy and Redistribution. Cambridge: Cambridge University Press, 2003. Collier, Ruth Berins. Paths toward Democracy. Cambridge: Cambridge University Press, 1999. Tilly, Charles Contention and Democracy in Europe, 1650 2000. Cambridge: Cambridge University Press, 2005 WEEK 4: THE (IM)POSSIBILITY OF DEMOCRACY AND CAPITALISM IN EASTERN EUROPE *Claus Offe (1991). Capitalism by Democratic Design? Democratic Theory Facing the Triple Transformation in East Central Europe, Social Research, 58(4), 865 92. Recommended: Bohle, Dorothee, and Béla Greskovits. Capitalist Diversity on Europe s Periphery. Ithaca, New York: Cornell University Press, 2012.
Ekiert, Grzegorz, and Stephen E. Hanson. Capitalism and Democracy in Central and Eastern Europe: Assessing the Legacy of Communist Rule. Cambridge University Press, 2003. Frye, Timothy (2010). Building States and Markets after Communism: the Perils of Polarized Democracy (Cambridge: Cambridge University Press, 2010). Introduction and chapters 1, pp. 1-48. Greskovits, Béla. The Political Economy of Protest and Patience: East European and Latin American Transformations Compared. Central European University Press, 1998. Roberts, Andrew L.. The Quality of Democracy in Eastern Europe: Public Preferences and Policy Reforms. New York: Cambridge University Press, 2009. WEEK 5 MARKETS AND (SOCIAL) DEMOCRACY (CLASSICAL DEBATES) *Hayek, Friedrich August von. Competition as a Discovery Procedure. Translated by Marcellus S. Snow. Quarterly Journal of Austrian Economics 5, no. 3 [1968] (2002): 9 23. *Karl Polanyi (2001 [1944]). The Great Transformation. The Political and Economic Origins of Our Time. Boston: Beacon Press, chapters 6 and 11, pp. 71-80, 136-141 Recommended Block, Fred. Karl Polanyi and the Writing of the Great Transformation. Theory and Society 32, no. 3 (2003): 275 306. Hayek, Friedrich A. von. The Constitution of Liberty. London: Routledge, 1990. Höpner, Martin, and Armin Schäfer. Embeddedness and Regional Integration: Waiting for Polanyi in a Hayekian Setting. International Organization 66, no. 03 (2012): 429 55. Levitt, Kari Polanyi. Keynes and Polanyi: The 1920s and the 1990s. Review of International Political Economy 13, no. 1 (2006): 152 77. Levitt, Kari. Life and Work of Karl Polanyi. Black Rose Books Ltd., 1990. Muller, Jerry Z. The Mind and the Market: Capitalism in Modern European Thought. 1st ed. New York: Alfred A. Knopf, 2002, chapter 13. Polanyi, Karl (2001 [1944]). The Great Transformation. The Political and Economic Origins of Our Time. Boston: Beacon Press
WEEK 6: SOCIAL DEMOCRACY Esping-Andersen, Gosta and Walter Korpi. Social Policy as Class Politics in Post-War Capitalism: Scandinavia, Austria and Germany. In: John H. Goldthorpe (ed.): Order and Conflict in Contemporary Capitalism. Studies in the Political Economy of Western European Nations. Oxford: Oxford University Press. 1984, pp. 179-209. Recommended Berman, Sheri. The Primacy of Politics: Social Democracy and the Making of Europe s Twentieth Century. Cambridge Univ Press, 2006. Blyth, Mark. Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century. Cambridge University Press, 2002. Giddens, Anthony. The Third Way: The Renewal of Social Democracy. John Wiley & Sons, 2013. Przeworski, Adam. Capitalism and Social Democracy. Studies in Marxism and Social Theory. Cambridge: Éditions de la Maison des sciences de l homme, 1985. Scharpf, Fritz Wilhelm, Ruth Crowley, and Fred Thompson. Crisis and Choice in European Social Democracy. Cornell University Press Ithaca, NY, 1991. WEEK 7: DEMOCRATIC CORPORATISM Cameron, David. Social Democracy, Corporatism, Labour Quiescence, and the Representation of Economic Interests in Advanced Capitalist Societies In: John H. Goldthorpe (ed.): Order and Conflict in Contemporary Capitalism. Studies in the Political Economy of Western European Nations. Oxford: Oxford University Press 1984, pp. 143-178. Recommended Reading Crouch, Colin, and Wolfgang Streeck. The Diversity of Democracy: Corporatism, Social Order and Political Conflict. Edward Elgar Publishing, 2006. Culpepper, Pepper D., and Aidan Regan. Why Don t Governments Need Trade Unions Anymore? The Death of Social Pacts in Ireland and Italy. Socio-Economic Review, February 2, 2014, mwt028. doi:10.1093/ser/mwt028. Lehmbruch, Gerhard, and Philippe C. Schmitter. Patterns of Corporatist Policy- Making. SAGE, 1982.
Maier, Charles S. (1984). Preconditions for Corporatism. In: John H. Goldthorpe (ed.): Order and Conflict in Contemporary Capitalism. Studies in the Political Economy of Western European Nations. Oxford: Oxford University Press, pp. 39-60. Rhodes, Martin. The Political Economy of Social pacts: Competitive Corporatism and European Welfare Reform. In The New Politics of the Welfare State, edited by Paul Pierson, 165 94, 2001. http://www.people.fas.harvard.edu/~iversen/pdffiles/rhodes2000.doc. Schmitter, Philippe. Still the Century of Corporatism? The Review of Politics, Vol. 36, No. 1, (Jan., 1974), pp. 85-131. WEEK 8 FROM DEMOCRATIC CORPORATISM TO SUPRANATIONAL PLURALISM *Coen, D. (1997) The evolution of the large firm as a political actor in the EU, Journal of European Public Policy 4(1): 91 108 *Van Apeldoorn, Bastiaan. Transnational Class Agency and European Governance: The Case of the European Round Table of Industrialists. New Political Economy 5, no. 2 (2000): 157 81. doi:10.1080/713687772. Recommended Journal of European Public Policy (Special Issue): Empirical and Theoretical Studies in EU Lobbying. 14, no. 3 (2007). Guest editor David Coen. Mahoney, Christine. Lobbying Success in the United States and the European Union. Journal of Public Policy 27, no. 01 (2007): 35 56. Tressel, Thierry, Prachi Mishra, and Deniz Igan. A Fistful of Dollars: Lobbying and the Financial Crisis. International Monetary Fund, 2009. WEEK 9 BUSINESS AND DEMOCRACY *Pepper D. Culpepper (2010). Quiet Politics and Business Power. Corporate Control in Europe and Japan. Cambridge: Cambridge University Press, chapters 1, 7pp. 1-24, 177-195. Recommended:
Hall, Peter A., and David Soskice. Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. Oxford University Press, 2001. Gourevitch, Peter A., and James Shinn. Political Power and Corporate Control: The New Global Politics of Corporate Governance. Princeton University Press, 2005. WEEK 10: INEQUALITY AND DEMOCRACY *Piketty, Thomas. Capital in the Twenty-First Century. First Edition. Cambridge Massachusetts: Belknap Press, 2014. Introduction, p. 1-38. Recommended Readings Bartels, Larry M. Unequal Democracy. The Political Economy of the New Gilded Age. (New York: Russel Sage Foundation, 2008). pp. 1-29; 283-305. Hacker, Jacob S., and Paul Pierson. 2011. Winner-Take-All Politics: How Washington Made the Rich Richer--and Turned Its Back on the Middle Class. New York: Simon & Schuster. Schäfer, Armin Consequences of Social Inequality for Democracy in Western Europe. Zeitschrift für Vergleichende Politikwissenschaft, 2010, DOI 10.1007/s12286-010-0086-6 WEEK 11: THE EURO CRISIS AND DEMOCRACY *O Rourke, Kevin H. (2011). A Tale of Two Trilemmas. Dublin: Department of Economics and IIIS, Trinity College, available at http://ineteconomics.org/sites/inet.civicactions.net/files/bwpaper_orourke_040811. pdf Deutschmann, Christoph. 2014. The Future of the European Union A Hayekian Regime? European Journal of Social Theory 17 (3): 343 58. doi:10.1177/1368431014530924. Recommended Blyth, Mark. Austerity: The History of a Dangerous Idea, Oxford: OUP 2013. Scharpf, Fritz W. (2011): Monetary Union: Fiscal Crisis and the Pre-emption of Democracy. LSE Europe in Question Discussion Paper Series, LEQS Paper 36/2011.
Streeck, Wolfgang, and Armin Schäfer, eds. Politics in the Age of Austerity. 1 edition. Cambridge, UK: Polity, 2013. Wolf, Nikolaus (2012). Crises and Policy Responses within the Political Trilemma: Europe, 1929 1936 and 2008 2011, unpublished paper, EHES Working Paper in Economic History No. 16, European Historical Economics Society Week 12: THE FUTURE OF DEMOCRATIC CAPITALISM * Streeck, Wolfgang. The Crises of Democratic Capitalism. New Left Review, no. 71 (2011): 5 29 Recommended: Crouch, Colin (2011). The Strange Non-Death of Neoliberalism. Cambridge, Uk: Polity Chapter 5, 97-124. Streeck, Wolfgang. Buying Time: The Delayed Crisis of Democratic Capitalism. Brooklyn, NY: Verso, 2014.