Why capitalism is a very social animal

Divergent Capitalisms
November 16, 2001

The outstanding feature of Richard Whitley's book is its attempt to take a systemic view of the complex process through which distinctive patterns of economic organisation emerge. He begins by reviewing existing studies on different forms of managerial capitalism, the institutional structuring of organisational forms and the comparative analysis of national forms of capitalism. From his critique of this work, he makes the case for a systemic approach to show how variations in institutional agencies and structures result in distinctive forms of economic coordination and control.

The book presents the "comparative-business-systems" approach as the basis for a framework for comparing forms of economic organisation. The framework characterises business systems, firms and work systems and their institutional environments. Whitley focuses on interdependencies between these characteristics and suggests that differences in societal institutions encourage particular kinds of economic organisation and discourage others. The form of organisation that emerges is shaped by the ways in which actors cooperate and compete for resources and legitimacy. Some of the assertions about the specific nature of interdependencies between particular characteristics of a society and consequent forms of economic organisation may be open to challenge. However, the whole piece provides a rich foundation for developing coherent accounts of the path-dependent evolution of distinctive, situated forms of capitalism.

Whitley demonstrates the utility of the systemic approach by analysing distinctive forms of economic organisation that have emerged in East Asia (where he compares the postwar Korean and Taiwanese economies) and the former state socialist societies of Eastern Europe (focusing on Slovenia and Hungary). The author is an established expert in this area, and provides a wealth of material for readers who have an interest in these particular economies.

The middle and end of the book could have been better integrated. As it stands, one has the impression of reading two monographs: one on the framework and the other on emergent forms of economic organisation in East Asia and Eastern Europe.

This does not make for easy reading. The sentences are long and complicated in their structure, making it difficult to keep track of the central argument. This is frustrating, as the argument itself is generally well worth following through. So although it demands no prior knowledge of the subject, the book is not one for dabblers. However, the systemic approach presented is a thorough one, and for those interested in the workings of the interconnected world and notions of globalisation, this book provides a valuable perspective on the parallel emergence of diverse forms of economic organisation.

Yasmin Merali is director, information systems research unit, Warwick Business School.

Divergent Capitalisms: The Social Structuring and Change of Business Systems

Author - Richard Whitley
ISBN - 0 19 829396 8 and 924042 6
Publisher - Oxford University Press
Price - £47.50 and £16.99
Pages - 301

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