Mark I. Vail has provided a careful reading and thoughtful discussion of themes in Marketcraft. In doing so he has pushed me to think more deeply about the book’s core claims.
As Vail recognizes, the book addresses two distinct audiences: those with a primary focus on policy issues and those with more interest in theoretical debates. For the policy audience, I contend that fundamental misconceptions about the nature of market governance (or “marketcraft”) not only reflect sloppy thinking but can also foster real-world policy failures. To illustrate the stakes in marketcraft, I review the greatest economic success story of recent decades, the information technology (IT) revolution, and the greatest failure, the global financial crisis. And I contend that both are products of home-grown American marketcraft. Vail challenges my characterization of the IT case as a success, noting that this revolution has a dark side as well, with rampant violations of personal property and an erosion of social cohesion. I concede this point, but I would add that few people would want to forgo the benefits of the IT revolution to remedy these problems. The more appropriate solution, as I stress in the book, would be better marketcraft: stronger regulation to preserve net neutrality, more assertive antitrust policy, a fundamental review of intellectual property protection, and reforms to labor, financial, and, of course, Internet privacy regulations.
Meanwhile, Marketcraft seeks to engage scholars of political economy across various disciplines, contending that even those who reject “free market” framing and embrace the study of markets as institutions deeply embedded in politics and society can unwittingly fall into the linguistic and conceptual traps of their intellectual adversaries. For example, some scholars of comparative political economy view liberal market economies such as the United States as institutional voids. They refer to Japan as an “embedded” economy, for example, and the United States as a “disembedded” economy. But the American market system is not disembedded; it is differently embedded. If we view the U.S. model as one characterized by highly competitive labor, financial, and product markets, following Peter Hall and David Soskice (The Varieties of Capitalism, 2001), then we would expect that it would require a daunting array of laws, regulations, business practices, and social norms to sustain those competitive markets.
Vail sees a tension between my contention that Japan has tried to emulate the U.S. liberal market model, on the one hand, and my claim that the U.S. model itself is highly governed, on the other. Yet this is precisely why I stress that Japan’s ambivalent embrace of the liberal market model has taken the form of a massive effort of crafting new laws and regulations, and not dismantling old ones. In fact, I would argue that his book and mine complement each other in the way that they both highlight how negative conceptions of liberalism—as freedom from government control, for example—can infiltrate scholarly analysis in pernicious ways.
