Although Anthony Giddens has thoroughly read Marx, which is why he stresses that capitalism “is a class society“ (Giddens 1984, 317) and that the “buying and selling of time, as labour time, is surely one of the most distinctive features of modern capitalism” (Giddens 1984, 144), when it boils down to defining capitalism, the definition he and his colleagues give is devoid of the working class and its exploitation and the focus is on the action of capitalists: capitalism is an “economic system based on the private ownership of wealth, which is invested and reinvested in order to produce profit” (Giddens et al., 2018, 14).
Insofar as they use and define the term capitalism, also neoliberal economists have often understood capitalism as economic order. For example, one of the most famous neoliberals, Milton Friedman, defines capitalism as “organization of the bulk of economic activity through private enterprise operating in a free market” (Friedman 1962 [2002], 4).
Varieties and Commonalities of Capitalism
Hall and Soskice’s (2001) varieties of capitalism approach are grounded in institutional political economy. They see the firm as the central actor in capitalism. According to Hall and Soskice, the firm operates in five spheres: (1) the sphere of industrial relations where working conditions are defined, (2) the sphere of relations between firms and their employees, (3) inter-firm relations, (4) the sphere of corporate governance, (5) the sphere of vocational training and education.
Hall and Soskice understand capitalism not just as an economic system, but as an economic system plus its governance and educational relations. Spheres (1), (2) and (3) constitute economic relations, sphere (4) is political in character, and sphere (5) is part of the cultural system of society. Sphere (5) disregards cultural institutions that are important in the definition of meanings, ideologies, and knowledge, and the reproduction of the body and the mind, especially the media system, entertainment, sports, health care, and the academic system. Furthermore, Hall and Soskice do not include systems and spheres shaped by the accumulation logic that stand outside of the economic system into the definition of capitalism. The problem of institutional approaches is that they define actors such as firms as capitalism’s central collective actors. They do not give enough attention to the key roles that classes and class struggles play in capitalism.
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Introduction