Democracy and Prosperity: Reinventing Capitalism through a Turbulent Century

In a climate of concern about the future of capitalism and democracy, this book provides a robust defense of both. Capitalism and democracy, Torben Iversen and David Soskice argue, are mutually reinforcing, and the combination has been remarkably successful over the past century. In what will probably be the most discussed part of the book, they anticipate that the symbiotic pair will continue to thrive, overcoming the challenges posed by populism and inequality. Democracy and Prosperity provides a challenge to those who believe that capitalism is increasingly unable to fulfill the needs of broad swaths of society and that democracy is creaking under the strains of populism. Three key arguments drive their analysis. First, the state is central. Capitalism requires a state that imposes competition upon business, ensures cooperative relations between labor and business, and invests in public goods (especially education and training). Second, the number of voters who benefit from policies promoting advanced capitalism is large enough to be decisive, thus incentivizing governments to maintain a healthy economy. Third, the advanced sectors of the economy depend upon networks of high skill workers embedded in specific locations and institutional frameworks. This means that the most important sectors of advanced capitalism are immobile; the world is not flat.