It is a widespread view that democracy and the advanced nation-state are in crisis weakened by
globalization and undermined by global capitalism in turn explaining rising inequality and
mounting populism. This book written by two of the world's leading political economists
argues this view is wrong: advanced democracies are resilient and their enduring historical
relationship with capitalism has been mutually beneficial. For all the chaos and upheaval over
the past century--major wars economic crises massive social change and technological
revolutions--Torben Iversen and David Soskice show how democratic states continuously reinvent
their economies through massive public investment in research and education by imposing
competitive product markets and cooperation in the workplace and by securing macroeconomic
discipline as the preconditions for innovation and the promotion of the advanced sectors of the
economy. Critically this investment has generated vast numbers of well-paying jobs for the
middle classes and their children focusing the aims of aspirational families and in turn
providing electoral support for parties. Gains at the top have also been shared with the middle
(though not the bottom) through a large welfare state. Contrary to the prevailing wisdom on
globalization advanced capitalism is neither footloose nor unconstrained: it thrives under
democracy precisely because it cannot subvert it. Populism inequality and poverty are indeed
great scourges of our time but these are failures of democracy and must be solved by
democracy.
