Ricardian political economy and the 'varieties of capitalism' approach : specialization, trade and comparative institutional advantage

Abstract

The ‘varieties of capitalism’ approach offers key insights into the institutional embeddedness of economic experiences. It performs an important function in providing a conceptual framework for empirical analyses of the way in which the economy both manifests, and itself is a manifestation of, a whole series of different experiences. However, I argue that the Ricardian themes evident in Hall and Soskice’s Varieties of Capitalism limit the potential effectiveness of the empirical analyses that the approach makes possible. Within the context of this latent Ricardianism, the economy is understood to be international, and the important differences within the economic system are those between different national ‘models’. I expose such assumptions to critical scrutiny, both analytical and empirical, before offering the outline of an alternative basis on which to ground the ‘varieties of capitalism’ approach. In contrast to the major themes of the Ricardian tradition, I argue for an approach that is sensitive to the social relations of production, the study of which requires political economists to transcend the artificial reification of ‘the national’ as a discrete unit of economic analysis