Political economy and globalization - Varieties of capitalism - Enterprise capitalism

6 important questions on Political economy and globalization - Varieties of capitalism - Enterprise capitalism

Where does enterprise capitalism exist?

Enterprise capitalism is often seen as 'pure' capitalism.
This model has been rejected in most parts of the world, except for the USA and the UK.

What ideas is enterprise capitalism based on?

On the ideas of classical economists such as Smith and Ricardo.

What is its central feature?

Faith in the untrammelled workings of market competition, born out of the belief that the market is a self-regulating mechanism, in line with the principle of laissez-faire.

These free-market principles have helped to keep public ownership to a minimum in the USA. Emphasis on high productivity and labour flexibility (trade unions are often weak).

What other factors have added to the success of the USA?

USA has a strong sense of national purpose, and has a network of regulatory bodies that constrain the worst excesses of competitive behaviour.

What has made principles of enterprise capitalism to become more prominent since 1980s in the USA and UK?

Adoption of the Reagan administration and the Thatcher government of neoliberal policies designed to het government off the back of business.

What are the disadvantages of enterprise capitalism?

- tendency towards wide material inequalities and social fragmentation (the tensions that such problems generate may be contained by growth levels that keep alive the prospect of social mobility, but without cultural and economic resources this might be unsustainable --> USA vs UK).
- Enterprise capitalism's 'turbo' features may have less to do with the dynamisms of the market or technological innovation than with an unsustainable boom in the housing and financial markets, and the growth of public and private debt --> economic model may be more vulnerable to the quirks of financial markets (see 2007-09 financial crisis).

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