Fairness and Division of Labor in Market Societies: A Comparison of the U.S. and German Automotive Industry

Fairness and Division of Labor in Market Societies: A Comparison of the U.S. and German Automotive Industry

Fairness and Division of Labor in Market Societies: A Comparison of the U.S. and German Automotive Industry

Fairness and Division of Labor in Market Societies: A Comparison of the U.S. and German Automotive Industry

Synopsis

Contrary to the explanations offered by the theory of non-reflexive, path-dependent institutionalism, the U. S. and the German automotive industries undertook strikingly similar patterns of industry modification under tough international competition during the 1990s, departing from their traditional national patterns. By investigating the processes of the U. S. and German adjustments, the author critically reconsiders the prevalent paradigms of political economy and comes to the conclusion that the evidence does not confirm the neoliberal paradigm. In order to better account for the recomposition of new market relations, which the author terms "converging but non-liberal" and "diverging but not predetermined" markets, he proposes an alternative model of "politics among reflexive agents," emphasizing different kinds of problem-solving practices among those reflexive agents. He argues that different forms and regimes of market are established in the process of recomposition, in which agents reflect upon not only market rationality but also upon their own institutions, creating new norms.

Hyeong-Ki Kwon received his PhD in Political Science from the University of Chicago. Currently he is a Principal Researcher in the Institute of Korean Political Studies and Lecturer in the Department of Political Science at Seoul National University, Korea. His research interests focus on democratic governance of industrial societies, particularly on the creation of new norms and the division of labor in the process of indusrial adjustments in advanced industrial countries, especially in the U. S., Germany, and Japan.

Excerpt

This book studies divergent ways of constituting social norms and efficiency in market societies by investigating the ways in which the U.S. and German automotive (parts) industries adjusted and changed during the 1990s. Based on intensive and extensive empirical study, this book critically reconsiders the prevalent paradigms of political economy, proposing an alternative “reflexive” model.

Recent changes in the U.S. and German automotive parts industries present major challenges to the prevalent paradigms of political economic literature, especially those produced by the neoliberal and the Varieties of Capitalism schools of thought, which lead one to expect a particular line of adjustment (such as the convergence of national economies toward liberal markets or the path-dependent divergence). Contrary to the explanations offered by the Varieties of Capitalism literature, the U.S. and the German automotive industries undertook strikingly similar patterns of industry modification under tough international competition, departing from their traditional national patterns. The U.S. and German automotive companies deintegrated their vertically integrated in-house production, contracted out with independent suppliers, adopted new, flexible-production systems, and developed new forms of long-term and closely interactive market relations.

Despite the similar patterns of adjustments in the U.S. and Germany, however, the neoliberal paradigm is not confirmed by this research. The apparent revival of contractual relations has not involved a neoclassical market of discrete exchange based on the anonymity principle; rather, both national markets share a common departure from the logic of the neoclassical understanding of market governance. Furthermore, the new form of long-term and closely interactive contractual relations, in which prior institutional arrangements about contracts and contractual relations do not produce stable governance, caused new problems in market . . .

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