Question 1: How Should the Role of Citizen by Designed and Performed? Social Justice and the Varieties of Capitalism: Individuality, Flexibility, and Social Well-Being

Abstract

Advanced industrial societies organize their national economies and their welfare states in fundamentally different ways. In recognition of this fact, social scientists have identified a variety of different types (or models) of capitalism. Anglo-US countries are generally taken to constitute one distinctive “liberal model” of capitalism that differs from the European and Japanese alternative models. The liberal model of capitalism is often criticized and widely believed to be incompatible with social justice. We are skeptical about this antiliberal consensus. Reasoning from a conception of social well-being grounded in the notion of individuality, we argue that any desirable model of capitalism requires, what we call, “institutional flexibility.” Although far from perfect, the liberal model of capitalism tends to have greater institutional flexibility than its currently feasible nonliberal alternatives. Different models of capitalism feature different schema for market organization. Generally speaking, Anglo-US capitalism comes close to a pure market model, whereas non-Anglo-US capitalism relies on various institutions to “tame” market forces. As a result, levels of job security and income equality that workers experience in the two capitalist systems differ significantly. Nonliberal capitalism, because of its corporate finance and governance structure, is better able to protect workers' jobs whereas liberal capitalism fails to protect jobs because corporate managers are held accountable to shareholders rather than to workers. Given the short time horizon of shareholders under liberal capitalism, corporate managers have no recourse but to layoff workers in bad times. Differences in wage bargaining systems also lead to different levels of income inequality within the market. Liberal capitalism produces more wage inequality because the wage bargaining process is more decentralized. By contrast, wage coordination in nonliberal capitalism results in a more compressed wage structure—hence a more egalitarian distribution of wealth. The two different schema of market organization are intricately interwoven with different varieties …