The Four Pillars of European Capitalism
The sociologist and anthropologist Karl Polanyi believed that society wants to protect itself from the Darwinian forces of competition. His words come to mind thinking about the hypothesis on European capitalism developed in recent times by Franco Amatori. According to the professor of Economic History at Bocconi, from the mid-nineteenth century to the mid-twentieth century European capitalism – taking into account the most significant countries: France, Germany, Great Britain, Italy, Spain and Sweden – had four pillars.
The first one was the contractual cooperation between firms to control the market. In the U.S. there was strong antitrust legislation so as to protect the country from "monster" firms, but it favored concentration in the end. This is the American paradox. Companies that could not agree with the others on prices tried to seize their rivals by competition. As long as they could provide good quality and reasonable prices, they were above the criticism of the opponents of concentration.
The second pillar was the hegemony of family business whereas in the U.S. firms were led by managers and viewed as commodities that could be bought or sold. The third pillar was the active presence of the State in the economy, the fourth was a politicized workers' movement. "In Asia (China and Vietnam) the goal of the political action of workers was national independence. In the U.S. good salaries and individual wealth expectations (the frontier myth) made workers reluctant to engage in militant actions. In Europe, the workers' movement focused on the idea of using power to change society, whether in reformist or radical mode".
In the second half of the 20th Century, these four pillars were apparently submerged by three waves: the process of Americanization; the constitution of the European Union based on "American" rules; the globalization. After the crisis of 2008 the original characteristics re-emerged: the State was once again deemed strategic; the number of antitrust cases increased dramatically; family businesses dealt more effectively with uncertainty than non-family firms; there was a resurgence of workers' movements. "The four pillars make European capitalism one of a kind. They are not ephemeral. Policymakers should be aware of them".
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