Session 1: The Class Compromise of "Embedded Liberalism"

I. What was the Class Compromise of Embedded Liberalism?

A. The Crisis of Liberalism (quote)

B. The Political Economic Puzzle of the Post-WWII Period (graphic)

C. The Main Dimensions of the Class Compromise of "Embedded Liberalism" (graphic)

D. National Models

1) Social Democracy (graphic)

2) Democratic Corporatism (graphic)

II. Antecedent Conditions and Path Dependencies of the Democratic Corporatist Cases

A. Path Dependency (graphic)

B. Historical Causes of Democratic Corporatism in the Small States (graphic)

C. Proximate Causes: The Great Depression and Fascism (graphic)

III. Patterns of Adjustment to the Great Depression

A. The Large European Economies

1) Review of the Cases (graphic)

2) Evaluation (graphic)

B. The Small European Economies

1) Review of the Cases (graphic)

2) Evaluation (graphic)

C. The Bretton Woods System (graphic)

IV. Keynesian Demand Management and Industrial Policy

A. Definition

B. Rationale (graphic)

C. National Patterns of Industrial Policy in Western Europe

1) State-Societal Arrangements (Peter Katzenstein, John Zysman, Jeffrey Hart) (graphic) (graphic)

2) Assessment

D. The Small European States

V. The Political Institutions of "Democratic Corporatism" and the Keynesian Welfare State

A. Definitions of "Welfare States" (graphic)

B. Competing Rationales for the Creation of Welfare States (graphic)

C. Structure and Size of Welfare States in Europe (graphic) (graphic)

D. Partisan Politics (graphic)

Handouts:

Paper 1 Instructions

Key Concepts: liberalism, laissez-faire, the "satanic mill," class conflict and class compromise, embedded liberalism, social purpose, social democracy, "contradictions of capitalism," democratic corporatism, "culture of compromise," peak associations, contingent consent, bounded uncertainty, social vs liberal corporatism, path dependency, proportional representation, consociationalism (consociational democracy) vs. majoritarianism, proximate causes, deflation vs reflation, currency devaluation, Keynesian demand stimulus, "full employment," pro-cyclical vs counter-cyclical economic policies, "Lib-Lab" coalition, Bretton Woods, par values and the $ "as good as gold," n-1 problem, economies of scale, information asymmetries, public goods, externalities, Bundesbank, "universal banking system," co-determination (Mitbestimmung), grandes écoles, statist, social citizenship, de-commodification, "three worlds of the welfare state," "logic of industrialism," the Piven and Cloward thesis.

Key Individuals: Karl Polanyi, John Maynard Keynes, John Gerard Ruggie, Adam Przeworski, Peter J. Katzenstein, Arend Lijphart, Peter Gourevitch, Jeffrey Hart, John Zysman, T.H. Marshall, Gøsta Esping-Andersen, Claus Offe, Harold Wilensky, Frances Piven and Richard Cloward, Theda Skocpol.

Study Questions:

(March 31, Wednesday):

List three historic causes (variables) that explain the rise of democratic corporatism in its "pure" form in the small states of Western Europe. Be prepared to elaborate on why these and not other relevant variables are most important in at least two of the countries analyzed by Katzenstein.

How was the path that Austria pursued different from that of the other small European economies?

(April 2, Friday; April 5, Monday):

How did the experiences of the democratic corporatist states differ from those of the larger European economies of Britain, France, and Germany?

(April 7, Wednesday):

Why has securing a liberal international economy been a key priority of the small states of Western Europe? Note at least three major reasons.

What is "domestic compensation" in the small states? Define the concept and then list at least three concrete examples.

How do the industrial policies of the small states differ from each other?

(April 9, Friday):

What institutions account for the "predictability" of the politics of the small European states? List three reasons why these institutional arrangements emerged?

What is the role of the Right- and Left-wing parties in the democratic corporatist cases?

How do the social and liberal variants of democratic corporatism differ? Specify at least four areas and explain.