Re-Forming Capitalism by Streeck Wolfgang;

Author:Streeck, Wolfgang;
Language: eng
Format: epub
Publisher: Oxford University Press, Incorporated
Published: 2011-05-14T16:00:00+00:00

Williamsonian institutions, by contrast, are devices for nonmarket though market-responsive and indeed market-driven coordination of economic behavior. They are purposely and voluntarily constructed by market participants to increase the efficiency of their exchanges. Williamsonian institutions include the private hierarchies of Coasian firms, as distinguished from the public hierarchies of the state devoted to enforcing obligations on and to the collectivity as a whole. They may also include trade associations, subcontracting networks, cartels, or arbitration procedures contractually instituted to settle commercial disputes more efficiently than public courts of law. While Durkheimian institutions may contain markets, Williamsonian ones grow out of markets, for example, when they promise to lower transaction costs below the costs of market exchanges. Where public institutions provide government, Williamsonian institutions offer governance through “private ordering” (Williamson 1987). Unlike Durkheimian institutions, they arise “from below” through voluntary agreement, representing shared rational interests in optimally efficient trading relations. Williamsonian institutions are therefore typically self-enforced, in the sense of rational choice institutionalism, as all parties are interested in their good performance and further existence. They also lend themselves to being conceptualized in efficiency-theoretical terms.

A few brief elaborations may be in order. For the sake of simplicity I have left aside contract and regulatory law, that is, obligatory institutions designed to enable the free play of market forces. While they are Durkheimian in the way they are created and enforced, their function is to make possible contractual agreement between consenting market actors (Durkheim 1964 [1893], Chapter 7). Contract law in particular consists of legal instruments, enforceable in court, that are provided by society to private actors for use at their pleasure (dispositives Recht). Sometimes such use is made conditional on the assumption of social responsibilities or on moderation of the terms of contracts between unequal parties, but less so as a social order becomes more liberal. Which aspect one emphasizes, contractual freedom or obligatory solidarity, depends to an extent on what one wants to prove. Durkheim was interested in the noncontractual conditions of a regime of private contracts, that is, in what he considered to be the indispensable obligatory underpinnings of liberal voluntarism. Modern “neo-liberalism,” by contrast, plays down as much as possible the role of public intervention, especially by government, suggesting the possibility or even reality of a social order that is enforced either entirely by itself or, at most, by civil law courts.

Political scientists sometimes fail to understand the nature of regulatory and contract law, and generally the distinction between market-distorting and market-making legal regulation. This leads to the frequently heard but still fundamentally misleading claim that the role of “the state” remains undiminished in comparison to postwar interventionism even in a deregulated, neo-liberal political economy, due to a continued presence and perhaps even an increase in the amount of contract and regulatory law. A different question, and one that is not just a matter of definition, is whether a de-politicized, “Williamsonian” social order, one that is entirely at the voluntary disposition of self-interested economic actors, can ever be more

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