Explaining facets of the hegemonic: political economy, domestic institutions and beyond
Explaining facets of the hegemonic: political economy, domestic institutions and beyond
Abstract and Keywords
This chapter evaluates the role of political economy and domestic institutional arrangements in the materialisation of hegemonic discourses. It examines whether the nature of political economy is sufficient to account for the materialisation process of hegemonic discourses and evaluates how useful is the ‘goodness-of-fit’ hypothesis found in Europeanisation studies. This chapter also analyses whether the combination of the nature of political economy and the nature of interest representation can account for the materialisation process of hegemonic discourses.
The explanations for the different facets of the hegemonic discourse of globalisation can be grouped together into three broad categories: explanations that focus on the nature of domestic economy; explanations that focus more broadly on domestic structures, and especially on the domestic structures of interest representation and state-society relations; and, finally, explanations that try to combine these two factors, i.e. nature of domestic economy and domestic structures. These three different explanations can be translated into the following research questions.
1. Is the nature of political economy sufficient to account for the materialisation process of globalisation discourse? Here, the focus is on the ‘goodness-of-fit’ hypothesis (among others, see Knill and Lehmkuhl, 1999; Börzel and Risse, 2000; Caporaso et al., 2001). For the purposes of this study, this hypothesis reads as follows: the degree and intensity of the adaptational pressures at the national level depend on the degree of the ‘fit’ or ‘misfit’ (i.e. the compatibility) of the national institutions and practices with those promoted by the hegemonic discourse of globalisation.
2. Is the nature of domestic structures sufficient to account for the materialisation process of globalisation discourse? Here, the focus shifts from the analysis of the nature of political economy to the broader structures of societal interest organisation and state-society relations (Cawson, 1978; Lehmbruch, 1979; Schmitter, 1979). These structures are important because they define the ways in which societies negotiate domestically social change and continuity (see also Schmidt, 2002).
3. Can the combination of the above two factors (i.e. the nature of political economy and the nature of interest representation) account for the materialisation process of globalisation discourse? (p.154) It should be stressed here that the above questions are not treated in this study as formal hypotheses, the validity of which will be tested against specific empirical evidence. Our purpose is not to use our empirical findings in order to test formally these hypotheses, but to elucidate what had really happened in these two countries, and on this basis to reflect on the explanatory capacity of the factors involved in the above questions. In this manner our case study findings aspire to play not a hypothesis-testing, but a hypothesis-generating role (see Lijphart, 1971: 691–693).
Is the nature of political economy enough to account for the materialisation process of hegemonic discourses?
The nature of political economy is one of the first factors to be considered in the explanation of the observed different facets of the hegemonic. The main hypothesis here would be that there must be a certain degree of ‘genealogical compatibility’ between the conditions in which a hegemonic discourse originates, and the conditions that a hegemonic discourse in turn generates. Thus in our case, one could assume that the practices and meanings that were generated by the hegemonic discourse of globalisation (e.g. liberalisation, flexibility, deregulation, privatisation, corporate tax cuts) would be more or less taken for granted, or smoothly absorbed in political economies that were based on institutional arrangements that were conducive with the globalisation discourse (i.e. political economies that had a small state control domain and low degree of regulation in the economy), whereas they would generate controversy, tension and clashes in political economies that were based on different, non-compatible arrangements (for instance the Continental/Mediterranean political economies).
Yet, the above analysis is characterised by significant conceptual and practical limitations. It is based on a conceptualisation of globalisation discourse as a predetermined phenomenon, independent of state policies and actions, and it portrays states as static structures, stripped of agency and strategic capacity. Two specific examples may help to clarify this point. The percentage of part-time employment in a country is usually treated as an indicator of the degree of labour market flexibility (the higher the percentage of part-time workers, the higher the degree of flexibility). In 1992 the percentage of part-time employment in Greece was 4.5% of the total employment, in Portugal 7.2%, in Ireland 9.1%, in Germany 14.5% and in the UK 22.9%. By 2002 part-time employment had remained unchanged in Greece at (p.155) 4.5%, whereas it had increased by 57% in Portugal (classified in the Mediterranean model of political economy with Greece), by 81% in Ireland, by 43.4% in Germany (the main representative of the Continental model) and by 9.2% in the UK (source: Eurostat, European Commission). There are two points to make here. First, it is demonstrated that it is wrong to conceptualise globalisation as something that was taken for granted by genealogically compatible political economies. Ireland, i.e. a ‘genealogically’ compatible political economy, was not the EU15 member state that made the fewest changes (less adaptation) but, in contrast, the one that adopted the most proactive stance and experienced the most significant change in its labour market. Second, we see that to cope with the same policy issue, similar economies, such as Greece and Portugal, adopted different strategies. This points to the significance of state agency, rather than the importance of the nature of political economy. The same picture emerges if one takes the example of corporate tax cuts. Ireland adopted in the second half of the 1990s the most proactive stance among the EU15 member states, reducing its corporate tax between 1995 and 2003 by 69% (from 40% in 1995, to 12.5% in 2003). In the same period the UK reduced its corporate tax only by 3% (from 33% to 30%), whereas in Spain the corporate tax remained unchanged at 35%, in Greece it was reduced by 12.5% (from 40 to 35%) and in Germany it was reduced by 30.3% (from 56.8 to 39.6%) (source: European Commission).1 Again, here the most significant ‘adaptation’ takes place in a genealogically compatible economy (Ireland), while the second most significant change takes place in a non-compatible economy (Germany). On the other hand, the UK (a compatible economy) and Greece (a non-compatible economy) adopted modest changes, and there was no change in Spain (a non-compatible economy). As above, the nature of political economy does not seem able to offer a persuasive answer for the observed variations; nor does the conceptualisation of globalisation as a predetermined phenomenon help us to understand the nature of, and the dynamics at play in, the above changes.
This analysis strengthens the significance of conceptualising globalisation as a hegemonic discourse, for such a conceptualisation suggests an independent and significant reordering effect even on political economies that are ‘genealogically compatible’ with the hegemonic discourse. Moreover, the outcome of the hegemonic restructuring at the domestic level is far from being predetermined, because the hegemonic discourse itself is not predetermined, and because the materialisation of the hegemonic discourse depends on (p.156) the actions and perceptions of domestic social actors. Hence, a hegemonic discourse exerts influence on the conditions in which agency takes place, it does not replace this agency or neutralise its capacity for change. It is this agency-centred and undetermined effect of the hegemonic discourse that breaks down the circular, self-proved explanation of the goodness-of-fit approach.
Another significant problem of the goodness-of-fit hypothesis is that it is based on a fixed conceptualisation of models of political economy. An uncritical endorsement of these models, however, runs the risk of reducing the factor of political economy to an ahistorical construct, incapable of strategic adaptation, evolution or learning, that is beyond change and social agency (see also Crouch, 2005). Yet, for instance, in Britain in the 1980s, Margaret Thatcher was functioning within an Anglo-Saxon political economy but, at the same time, was changing the nature of this political economy by reversing the long-established tradition of Keynesianism, putting an end to the powers of the trade unions, and minimising welfare state provisions. Along the same lines, the rise of the social partnership in Ireland after 1987, although it took place within specific politico-economic arrangements, in fact transformed Irish political economy. Thus, a new hybrid politico-economic model emerged that combined a deregulated Anglo-Saxon political economy with a centralised, consociational mechanism of interest representation -what in the Irish public discourse started to be referred to as the ‘Irish model of political economy’. Therefore, the political economy factor should always be examined in dynamic terms and not as an end product.
It is also important to note here that the specific nature of Irish political economy makes it even more difficult to determine the role of political economy in the communication of globalisation discourse (Ireland should be treated here as a representative case of a wider group of states). For Irish political economy is based on a rather dualistic structure. A liberal, highly flexible and foreign-owned sector (product of the huge increase in inwards FDIs in the 1990s), coexists with an indigenous, more traditional and regulated, manufacturing sector (Enterprise Strategy Group, 2004; Hardiman, 2002). Therefore, the assumptions about the ‘compatibility’ between the Irish political economy and globalisation, and the role that this compatibility has played in the materialisation of globalisation discourse are further problematised, for, even if they were true, they would not really capture the whole of the Irish economy.
Finally, even when the direction of changes generated by a hegemonic (p.157) discourse is more conducive to the tradition of a certain political economy, one would expect that social groups that are on the losing side of the changes under way would protest and try to block the respective governmental policies. To put this differently, the fact that the contemporary Irish political economy has Anglo-Saxon characteristics (in terms of the degree of regulation and state control domain), does not mean that the changes in the domestic environment and the domestic distribution of power, produced by the hegemonic discourse of globalisation would escape, if not public protest, at least public deliberation. In this regard one must not conflate the (non-) power of an actor with its willingness to dispute or deliberate on existing or changing practices. For instance, the fact that the ICTU and its leaders and members have been socialised within a rather unregulated economic environment, does not mean that when ICTU's suggestions and preferences are marginalised in the policy process, ICTU will not protest, or will not, however unsuccessfully, try to block governmental policies that are disadvantageous for its members (e.g. an 81% increase in part-time employment). The same goes for the ICTU's preferences. The fact that the Irish labour market is flexible in comparison to most of its European counterparts, does not mean that the Irish labour force has a fixed preference in favour of flexibility practices.
Based on these observations it can be argued that the nature of political economy cannot fully account for the materialisation of globalisation discourse. Thus, although the importance of the nature of political economy in the hegemonic discourse materialisation process is undisputable, a clear correlation between the nature of the political economy and the nature of the materialisation of a hegemonic discourse cannot be established.
Is the nature of domestic structures enough to account for the materialisation process of hegemonic discourses?
To get a picture that can better account for the different facets of the hegemonic discourse of globalisation, one could qualify the role of the nature of political economy with a study of the case and time-specific (domestic) conditions that affected the capacity and willingness of the various domestic actors to dispute or deliberate on the practices and policies that were generated by globalisation discourse.
In this regard, the existence of a highly institutionalised, well-functioning, and ever-inclusive social partnership, cannot but be (p.158) considered instrumental in the explanation of the communication of globalisation discourse in Ireland. Thus, although Irish political economy is usually classified in the Anglo-Saxon group of economies, it was characterised throughout the period under investigation, as mentioned above, by a strong and expanding consociational institutional base – a defining characteristic of Continental political economies (see Hardiman, 2002; Murphy, 1999; O'Donnell and O'Reardon, 2000). It seems certain that this distinctive characteristic of Irish political economy played a crucial role in the way in which the hegemonic discourse of globalisation was materialised. Within this framework it could be argued that the effects that were generated by the production of new winners and losers, inherent in any hegemonic discourse materialisation process, were mediated, negotiated and resolved at the level of this consociational mechanism, ever dominant in the Irish politico-economic life. Along these lines it could also be argued that the fact that many heads or representatives of public institutions in Ireland, have grown up together or have personal/family relationships, because of the small size of Irish society, must have facilitated the above dynamics.
Within the same framework, it could also be argued that, in the case of Greece, it was the confrontational, fragmented and particularistic structure-of-interest representation that gave rise to the ‘zone of confrontation’ that we observed. In this way, the lack of ‘coordinative’2 and consociational institutional arrangements exacerbated the negative effects of globalisation discourse (in terms of winners and losers) in the public realm.
Does this mean that the structure-of-interest representation can account for the hegemonic discourse communication process? Based on our evidence, the answer is no. While the structure-of-interest representation tells us important things about the forces that underlie the production of a public discourse, it tells us little about actors’ preferences and understandings. To put this more clearly, although the study of the structure-of-interest representation tells us much about where and with whom the actors speak, it tells us little about what they say. Thus, it seems that the problem mentioned with regard to the nature of political economy as an explanatory factor, also applies to the structure-of-interest representation. The fact that a political economy is based on consociational institutional arrangements does not mean that the social actors that are negatively affected by the hegemonic discourse will not react; it just means that their reactions will be brought into and negotiated within the framework of these institutional arrangements. Yet in the case of Ireland no (p.159) such negotiation was found. It was not that the social partners were negotiating economic globalisation policies among themselves, but rather that the promotion of these policies was taken as a given; that is, it was beyond discussion and public or intra policy group deliberation.
I do not mean here to ignore or downgrade the important role of social partnership in fostering consensus around economic globalisation policies. For sure, the ‘coordinative’ role (see Schmidt, 2002: 232–234) of the social partnership was crucial. But, the important issue here is not how this consensus was fostered but what allowed this consensus to emerge in the first place. Greece for instance did not only lack a social partnership to foster consensus around economic globalisation policies, but most importantly it lacked such a consensus in the first place. Of course, the lack of a ‘coordinative’ forum exacerbated the controversy over these policies in the public realm at the ‘communication stage’ of discourse (see Schmidt: 234–239). Thus the key piece of the puzzle still seems to be missing.
Nature of political economy plus structure-of-interest representation: is a combined explanation enough?
It could be argued that it was on the one hand the genealogical compatibility between the globalisation discourse and the Irish political economy, and on the other hand the strong consociational base of the Irish political economy that led to the apolitical facet of globalisation discourse, observed in the Irish case. Respectively, it could be argued that the effects from the incompatibility between the hegemonic discourse of globalisation and the Greek political economy, were exacerbated by the overly fragmented and particularistic structure-of-interest representation that characterises Greek politico-economic life. Thus, it may be the case that the solution to our puzzle is based on the combination of the two factors examined above, i.e. the nature of political economy and the nature of the structure-of-interest representation.
The combination of a nature-of-political-economy perspective with a case-specific, domestic institutional arrangements analysis appears to improve significantly the understanding of the nature of hegemonic discourse materialisation. It takes into consideration, not only factors concerning the degree of genealogical compatibility between hegemonic discourses and national political economies, but also factors concerning the way in which different societies negotiate social change domestically, i.e. whether there is a strong or weak (p.160) intermediation structure-of-interest representation, and whether this structure promotes consensus building, or rather enhances the reproduction of social divisions and antagonisms. Yet, still this combined explanation does not seem sufficient to account for why there was no public or intra-group deliberation/negotiation in the case of Ireland.
Accordingly, the Irish case seems to suggest that the nature of political economy and the structure-of-interest representation cannot on their own account for all facets of the hegemonic; they cannot offer a conclusive explanation for the materialisation of globalisation discourse. To address this problem, some scholars have suggested that we need to take into consideration the different political cultures that exist in different countries. In Ireland this would include the ‘non-ideological’ and ‘consensus-driven’ public life, whereas in Greece it would point towards the ‘high degree of abstraction and polarisation’ that traditionally characterises public debates (see also Antoniades, 2010).
Yet, the factor political culture seems to obscure rather than elucidate the communication of globalisation discourse. In the case of Ireland, for instance, it seems to ignore the turbulent industrial relations that have defined most contemporary Irish economic history. It also fails to provide us with a convincing answer as to why this consensus did not take place earlier (or later), especially since the infrastructure of the social partnership was in place since the early 1970s.
It seems that in order to grasp the apolitical facet observed in the Irish case, one needs to dig deeper into the reasons that affected social actors’ understandings, and their capacity and willingness to dispute or deliberate on the meanings and practices of globalisation discourse. Following such a deep, case-specific, analytically bottom-up route it becomes apparent that the social technology (i.e. the hegemonic – globalisation discourse) that in the Greek case came at a certain historical period to be communicated and materialised as a new zone of contestation and confrontation concerning the redistribution of wealth and power; in the Irish case it was communicated and materialised as a historically unique economic miracle, a social technology of prosperity and wealth generation (for the Irish ‘economic miracle’ see Walsh, 2000; for a critique, see Allen, 2000).
Indeed, as it has been well documented, during the 1990s and up to the first half of the 2000s Ireland was the fastest growing economy in the OECD (see various Economic Surveys on Ireland published by the OECD). It evolved from a ‘cohesion fund’ poor country, to a most prosperous economy. Its gross domestic product (GDP) per capita as (p.161) a percentage of the EU average increased from 69.7% in 1990 to 135.1% in 2002 – a 93.8% increase within almost a decade! In addition to growth rates, the development of a number of macro-economic factors was also impressive. Unemployment fell from 13.4% in 1990 to 4.3% in 2002. Industrial production (excluding construction) grew with an average of 13.5% during 1992–2000, whereas the EU15 average was 1.7%. The general government gross debt reduced from 94.2% of GDP in 1990 to 32.7% in 2002 (source: European Commission). Thus, from the ‘poorest of the rich’ in 1988 (The Economist, 1988), Ireland became ‘Europe's shining light’ (Economist's survey, 1997) in the 1990s.
For sure, the above numbers tell us nothing about social and income inequalities, and indeed few analysts would dispute the fact that the economic miracle maintained, if not exacerbated, such inequalities (see Allen, 2003; Kirby, 2002). Yet, one can hardly downgrade the positive impact that the rapid economic growth had on Irish population, in absolute terms. Along these lines, Whelan and Layte (2004: 39) note with regard to social mobility:
Throughout the course of the economic boom Ireland has remained a highly unequal society in terms of the distribution of income and there is no evidence of a movement towards a more meritocratic society … However … economic growth and, in particular, the economic boom of recent years has been associated with substantial social mobility and with increased equality of opportunity. (see also Smith, 2005: ch. 2)
The positive impact that the economic miracle had on the living conditions of the great majority of the Irish population is also reflected in the shift in the mood of public opinion captured in Euro-barometer surveys at the end of the 1980s. In particular, during the period 1980–87, to the question whether the next year would be better or worse in comparison to the current one, the Irish were among the most pessimistic Europeans (the percentage of negative replies varied between 45% and 55%). Yet, after this period a radical change in attitude, from pessimism to optimism, is observed. Thus, after 1987 the Irish were constantly among the most optimistic Europeans (and had the highest percentage of positive replies in 1988, 1990 and 1994, and the second lowest percentage of negative replies in 1994 and 1996). This significant shift of attitude cannot but be related to positive personal experiences and absolute gains in living conditions.
Following this reasoning, it can be argued that it was this economic miracle experience that defined what was conceivable and what was (p.162) non-conceivable, what was part of politics and what was beyond politics, what in general could be spoken of and how, within the Irish public discourse of the time. Additionally it can be argued that this prosperity was so deeply and widely felt in Ireland, that it marginalised or made (temporarily) irrelevant any social clash as to who gets what. That is, the great majority of the population was experiencing such an absolute gain in the conditions of its everyday life, that until the end of the 1990s, relative-gains considerations remained beyond public deliberation.
The explanation proposed here goes beyond the nature of political economy, and differs from explanations focused on structure-of- interest representation. It is an explanation grounded on changes in the material environment, but the emphasis is on how and why real people experience specific changes in specific ways. In this regard, in the case of Ireland some further historical contextualisation adds important information to the nature of the materialisation of globalisation discourse. It can thus be argued that the economic miracle was translated in Ireland into a positive social shock that disrupted the continuity of a generations-long collective memory and social self-portrayal that was driven by the potato famine of the nineteenth century. Hence, it was this positive social shock that ‘placed’ the practices, mechanisms and policies of the economic miracle beyond the sphere of the socially contested and negotiable, beyond the sphere of the political. Gradually, however, and despite the fact that wealth was still generated at an unprecedented historical pace, the effect of this positive shock started to fade away and give way to relative-gains and wealth disparity considerations. The counterfactual bottom line here is that if the specific historical experiences were not there, the positive shock would not have had the impact it did. On this basis, it can also be argued that one cannot easily generalise the findings from the Irish case, as it should not be taken for granted that the ‘economic miracle’ factor will have exactly the same effect on each and every national context.