Transformations of advanced capitalist democracies in the digital era

Abstract

I would like to start by thanking Martin Höpner for his superb review essay of Democracy and Prosperity, which Torben Iversen and I published at the start of 2019. Martin Höpner’s review essay, published in Transfer 3/2021, is powerfully written and insightful, it covers much ground, it is sympathetic but critical, and it certainly pulls no punches in the critical sections. This piece is not a direct reply to Höpner’s criticisms. I want rather to put our position in a somewhat different – perhaps less bald – way than we did in the book (benefiting from at least three years of reflection, discussion and commentary by others since we sent the draft to the publisher). I would also like to use this essay to sketch out ways in which one might think about extending the argument. A fundamental starting point is Martin Höpner’s perceptive comment that the book is a theory of advanced capitalism, not a development of our intellectual background in essentially static varieties of capitalism. As a theory of advanced capitalism our approach is Schumpeterian, dynamic and historical, rooted in changing technological regimes and hence also potentially unstable over long periods. We regard governments of advanced capitalist states as critical to successful technological regime-change and to innovation. By contrast with Marxist approaches, the driver of advanced capitalist democracies is government responsiveness to conflicts between progressive, aspirational and more highly educated and skilled forces in the electorate and conservative, reactionary and populist forces. We theorise why we believe that progressive democratic forces win out over the long run in a technological regime – here in the putative future Polanyian second movement discussed below, as graduate jobs and graduates become an increasingly large proportion of the workforce (and as in the Fordist regime throughout the Trentes Glorieuses an increasingly large proportion of the workforce had well-rewarded unionised employment). But the ICT revolution also sharply increased market income inequality, as Piketty has notably pointed out (Piketty, 2014). It has been widely assumed that democratic governments are unable or unwilling to correct this through redistribution. This (as it turns out largely wrong) assumption has been justified by appeal to the political power of advanced capitalism or the wealthy, or to the