The clash of capitalisms through successive European crises: towards a nuanced understanding of capitalist restructuring

3 October 2022

Ben Clift - Honorary Research Fellow, SPERI, and Professor of International Political Economy, University of Warwick

Sean McDaniel - Senior Lecturer in Political Economy, Manchester Metropolitan University

European pressures manifestly constrain and shape national capitalisms, yet they are fragmented and differentiating, producing capitalist variegation rather than convergence.

Macron’s call for a European levy on energy companies reveals divergent approaches to balancing the role of states and markets in European and British responses to the current energy crisis. This shines the light on differing modes of capitalist organisation across the continent, a perennial theme for scholars of European political economy.  

Rather than pigeon-holing political economies within the restrictive dualisms of either Varieties of Capitalism (VoC)  or ‘growth models’ (GM) perspectives, comparative capitalisms scholars need to be attuned to the substantial variegation and hybridisation of contemporary capitalist transformations. These offer more promising avenues for future comparative capitalisms research.

Two bodies of literature dominate the way we think about the relationship between European integration and comparative capitalisms. Confusingly, these point to opposite conclusions about how the EU has promoted or punished particular configurations of liberal markets.

The first, adopting a VoC framework, argues that European integration leads its member states to converge on an Anglo-Saxon, liberal market economy model. The second, which draws on a distinctive GM perspective, adopts a contradictory position that suggests the EU’s neoliberal rules-based governing regime induces a convergence towards the export-led model spearheaded by Germany.

While these approaches have catalysed important debates about European capitalisms, they are ill-equipped to explain post-global financial crisis (GFC) economic restructuring and the fall-out from Brexit. Their contradictory findings highlight the folly of assuming that any single model of capitalism is being induced by EU integration. 

European political economy is much more diverse than crude convergence theses imply, and is marked instead by a significant degree of capitalist variegation and hybridisation. Accepting such diversity leads us to consider how EU integration exerts multifaceted pressures, sometimes pulling in different directions, and often mediated by national contexts.

France, European Integration and the politics of restructuring – the ‘clash of capitalisms’

Unlike existing comparative capitalisms scholarship, Constructivist Institutionalist (CI) frameworks focus less on capitalist forms and foregrounds the role of different capitalist ideas. They identify how distinctive national traditions, institutions and understandings of states and markets, shape the behaviour of state actors. Applying a CI analysis to the political economy of France – a complex case that has proved particularly resistant to conventional analyses –highlights the variegated nature of European capitalisms,  complicating our understanding of EU influence.

Contemporary French capitalism may be broadly described as post-dirigiste. France partially retreated from a post-war dirigiste model of state-directed capitalism, shifted towards market liberalisation, deregulation and privatisation. Nevertheless, the 21st Century French state has reimagined rather than relinquished its ambition to shape French capitalism’s evolution through a ‘state-industry-finance nexus’.

Successive French governmental responses to the Eurozone and GFC upheavals offers a useful window into these dynamics. Early in his Presidency, identifying a crisis of Anglo-liberal financialised capitalism, Hollande sought to revitalise French industry by reviving dirigisme through a flagship La Nouvelle France Industrielle programme. Yet this strategic interventionist vision clashed with the EU’s competition policy norms, and distinctive ‘level playing field’ agenda for export-led growth. Hollande’s failure to reform EU policy ushered in a French industrial strategy shift towards German-style supply side reforms prioritising firms’ cost competitiveness .

This episode illustrates the ongoing ‘clash of capitalisms’ at the heart of European economic governance, between a French dirigiste vision and EU (German-inspired) rules-based neo-liberalism. Yet it would be wrong to characterise French capitalist adjustment entirely in terms of neoliberal convergence. The French state continued to actively promote French interests through industrial policy, circumventing EU pressures and anti-trust laws to create a multimillion-euro fund, channelling state aid to businesses via its public investment bank. This ‘market-making’ conception of industrial activism in support of selected French firms and sectors, and willingness to bend and alter EU frameworks in order to extend its influence, have reinforced the post-dirigiste state at the heart of French capitalism.

France’s post-Brexit financial liberalisation

Despite France’s historical hostility to UK-led economic and financial liberalisation, and earlier promises to re-regulate financial capitalism, under Hollande and then Macron the French state increasingly embraced liberalised financial capitalism. French authorities saw the 2016 Brexit vote paradoxically as an opportunity to increase finance’s prominence within French capitalism. French politicians sought to make Paris Europe’s leading financial centre, including by welcoming FinTech and euro-denominated clearing services.

Former investment banker Macron intensified these efforts, with softer approaches to financial taxation and regulation, seeking to eliminate the ‘undue’ influence of EU law. Meanwhile, France’s support for an EU Capital Markets Union (CMU) is a strategic manoeuvre designed to both boost the financial influence of Paris and situate French financial regulatory norms at the forefront of any future integrative project.

The post-dirigiste state is actively mobilising to enhance the position of financial capital within French capitalism, exploiting the political space opened up by Brexit. Importantly, this shows that France’s incomplete steps towards a more liberal market economy have been occasioned not by European integration, but by European disintegration.


European pressures manifestly constrain and shape national capitalisms, yet they must be viewed as fragmented, differentiating, mediated by domestic state actors and producing capitalist variegation and hybridisation. Counter to functionalist convergence tendencies within the comparative capitalisms literature, different conceptions of state-market relations crucially mediate the relationship between national capitalisms and European integration. Parsimonious bifurcated visions of European capitalist futures fail to capture these complexities. To examine these dynamics, we must develop more granular accounts of the ideational conditions that facilitate particular modes of capitalist restructuring – and how political acts of market-making play out. Different conceptions of the market underpin the ongoing ‘clash of capitalisms’ surrounding

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