Capitalism and political power

"Capitalism and Political Power" presents the author’s research spanning economics, law and politics. Its central idea is that governments need two components to consolidate their position: legitimation and economic power. Legitimation is conferred by popular support, and economic power is based on natural, temporary possession of capital. This concept draws on Nouriel Roubini and Jeffrey Sachs’ seminal research and on George Tsebelis’ political theory, looking at political systems as structures formed by separate political agents – “veto players”. Substantial evidence is provided that the more complex the political system is, the more capital it holds, and that the government has only a relative impact on redistribution of capital, decreasing ever since the mid-1980s, as political systems began to move towards simplification and standardization. Krzysztof Waśniewski (b. 1968), Doctor of Economics, Assistant Professor at the Faculty of Management of the Andrzej Frycz Modrzewski Cracow University in Cracow, Poland. His interests, which earlier focused on corporate strategies, now also include institutional economics and other social disciplines such as law, political sciences and sociology.

Contents Introduction 7 Chapter 1. The constitutional state as a functional technology 11 1.1. The classical, sociological canon set by Emile Durkheim and Max Weber 15 1.2. Fernand Braudel and the “set of sets” theory 19 1.3. Jurgen Habermas and discursive politics 22 1.4. The utilitarian view of the state 25 1.5. Thomas Malthus and the demographic factor 28 1.6. The theory of social contract: Rousseau and Rawls 30 1.7. Herbert Hart’s theory of law 33 1.8. The division of powers in political systems 35 1.9. Attempt at the classification of political systems 38 1.10. The economic role of political institutions and Barry Weingast’s theory 40 1.11. Recent evolution in political systems and in international relations 45 1.12. Changes in international law 49 1.13. Migrations 53 1.14. International aid as an aspect of international relations 55 1.15. Investor-state disputes and international law 61 1.16. A tentative conclusion: political systems seen as technologies with a lifecycle based on efficiency 73 Chapter 2. The fiscal function of constitutional states 90 2.1. The main fiscal trends observable in the sample of 77 countries 96 2.2. Bank lending, private debt and public debt 102 2.3. The general issue of public debt 103 2.4. Types and clusters of political systems in the sample of 77 countries 118 2.5. Fiscal stances typical for political systems 121 2.6. Conclusion – the institutional foundations of capital appropriation in political systems 133 Chapter 3. Changes in the ways that capitalism works 137 3.1. Environmental challenges 138 3.2. Accumulation and depreciation of capital stock in the global economy 146 3.3. The velocity of money 149 3.4. The velocity of money and financial markets 159 3.5. National case studies 167 3.5.1. United States 169 3.5.2. Bolivia 171 3.5.3. New Zealand 175 3.5.4. Mexico 181 3.5.5. Israel 184 Concluding remarks 187 Bibliography 199 Index of names 210 List of Tables 213 List of Figures 214