CONVERGENCE BY CONVICTION: POLITICS AND ECONOMICS IN THE EMERGENCE OF THE 'ANGLO-AMERICAN MODEL'.

The end of the Cold War marked the closure of a distinct era in geopolitics and international relations. It changed not only the relations between states and rival blocs of states, but the very boundaries and definitions of states and thus the component parts of the international system. The consequences of this rapid and dramatic transformation constitute the premises upon which international politics are now conducted and the foundations on which a new global order will be built or from which, as seems more likely, a pattern of controlled disorder will emerge. [1]

It is nevertheless essential to remember that what made the Cold War unique in the succession of international systems was that it was simultaneously a pattern of international relations and also a confrontation between social systems and the ideologies evolved to explain, inspire and guide them. International orders have come and gone; settlements between states have been imposed and over rime disintegrated as the balance of military and economic power has altered and as the shifting interests of states have reconfigured alliances. But the Cold War was different, because it pitted two rival social orders in a global competition. The competition, moreover, was pervasive: communism challenged capitalism as an economic system, promising greater wealth and equity; it held up a different model of development for states and peoples seeking to capture the benefits of modern technology; it claimed to represent a better and higher form of democracy and to give a deeper meaning to democratic citizenship, making citiz enship economic and social as well as merely civic or political; and it proclaimed itself morally superior to capitalism for it could plausibly be said to encourage a more social and collective morality instead of the competitive individualism characteristic of liberal society.

The Cold War's ending therefore implies more than a shift in the rules and the players in the system of international relations. [2] It signals in addition the resolution of the challenge to capitalism on these multiple fronts. [3] Communist societies may have been more equal, but equality typically became a shared poverty; communist regimes seemed for a rime to be able to engineer a kind of "forced march" toward industrial development, but growth through the massive mobilization of resources produced diminishing returns and generated countervailing blockages that ultimately ground the centralized economies to a halt; developing nations that adopted statist, non-market strategies for growth based upon nationalization, import substitution and autarchy likewise faltered and were forced into ignominious retreats before the forces of the world market and the IMF; the citizens whose public and private lives were circumscribed by the institutions of 'actually existing socialism,' at least in eastern Europe and the former Soviet Union, over time withdrew their support from these governments and ultimately undermined their legitimacy; while the crimes and general lack of accountability of the leaders of the socialist states utterly discredited claims of the moral superiority of the socialist model.

To this extent the end of the Cold War is of world-historic significance (if such Hegelianisms be allowed in the post-ideological and post-teleological discourse in which we must now speak). Its significance is greatest, of course, for those who experienced socialism's failures up close and whose burden it is now to recreate stable societies, economies and political systems in environments strewn with the economic, social and civic legacies of failure. It is also extremely significant for leaders and ordinary men and women in the developing countries, for whom the options for generating successful economic development would seem much more constricted now than they appeared in the not too distant past. In the advanced societies the significance of the end of the Cold War and the exhaustion of the socialist project is obviously less, and less wrenching. But it does change the political landscape, compressing the left-right dimension of the political spectrum and effectively removing what was once both a compel ling vision and an occasionally inspiring political rhetoric. It must also change, sooner or later, the intellectual framework within which both scholars and the public operate. Intellectuals, politicians and ordinary citizens often act as if trapped in discourses that derive from the past and fail to take recent history seriously, but ultimately this, too, will have to change.

There is inevitably resistance to efforts to alter the intellectual frameworks that served so well and for so long to organize knowledge and mobilize prejudice during the Cold War. Resistance stems not merely from self-interest, but also from very understandable needs for defining oneself, for orienting behavior, for guiding thought as well as action; and these needs affect intellectuals and intellectual disciplines as much as they do parties, political institutions and voters. Of course, the ending of the Cold War has little meaning for many academics: mathematicians and scientists, for example, are likely to be relatively untroubled by recent events and historical turns, at least in their calculations. But social scientists and historians, especially those who write and think about society, social change and issues of equity, justice and political economy, have an almost desperate need to rethink the models and assumptions that underlie their research and inform their arguments and analyses. In particular, there is a strong and self-evident case for re-examining questions about the direction of social change in the modern era, for re-opening debates about 'modernization' and economic growth and for asking more pointed questions about visions of the good society and models of what types of social and economic arrangements, and what various mixes of market and non-market institutions, work and do not work in pursuing the widely shared goals of economic development, welfare, and meaningful citizenship. [4]

Surely the starting point for such a re-examination must be a recognition of the extent to which assumptions and aspirations peculiar to the Cold War were woven into prior models and theories. Modernization theory and the theory of "totalitarianism" are two obvious and closely interconnected cases. Both sought to capture the trajectory of social and political change and to provide a framework within which to incorporate capitalist and communist variants of modernity. The two differed fundamentally, of course, in their assessment of the confrontation between the two social systems and the virtues of the rival paths to modernity which they represented. Modernization theory posited a set of linked transformations in economy, society, politics and culture through which any modernizing society must pass. The links were conceptualized in terms derived largely from structural-functionalism and the driving force was most often seen as either technology and economic growth or as the desire to achieve development and to acquire advanced technologies. Capitalism was ordinarily understood as the preferred path, but modernization theorists were most often political liberals who conceded that capitalism had costs and capitalist growth was difficult to achieve in less developed societies. Hence it was acknowledged that circumstances often required a more aggressive mobilization of resources and that this often entailed nationalist or communist revolutions and a period of harsh rule. [5] Nevertheless, the assumption was that even those societies which were forced to detour through communism would emerge looking much like those which followed the less disruptive path of liberal capitalism. They would all have modern economies that would require, for their successful operation, well-educated workers or citizens and increasing numbers of professionals who would, in turn, impose on the society as a whole the typically modern values of the educated classes: secularism, meritocratic social structures, bureaucratic states and pluralis t polities that would provide more or less effective representation of major interests. [6]

What made modernization theory so attractive during the first quarter century of the Cold War were three basic features: it provided scholars and policymakers with some genuine purchase on the very real and extremely dramatic social changes through which all societies seemed to be passing; it offered a relatively non-threatening reading of the conflict between capitalism and communism which nevertheless held our the prospect of the ultimate triumph of liberal capitalism; and, finally, in the hands of development experts it could be fashioned into a program of non-communist progress. The classic example was Walt Rostow's book on The Stages of Economic Growth, which was appropriately, if rather pretentiously, subtitled A Non-Communist Manifesto. [7]

Totalitarianism represented a far less optimistic reading of the course of recent history and was not at all sanguine about the final outcome, but it was equally a product of the Cold War and just as much a viable means of organizing insights and understandings of this fundamental fact of life at mid-century. [8] Unlike modernization theory, however, the theory of totalitarianism regarded communism not as a detour but as a terminus, as a system where the concentration of power and the elaboration of "total" control over all the diverse realms of social, cultural and political life effectively blocked endogenous change and precluded the benign evolution of society and of the regime that organized it. [9] The great virtue of totalitarian theory was that it seemed to apply as well to fascism as to communism and thus offered itself as a reasonably economical explanation for the two great threats to liberal capitalism. In so doing, of course, it deliberately ignored the utterly contrasting ideologies which motiva ted the two movements and obscured the differences in their social origins and bases of support and in their effects upon social and economic structure. The popularization of a political rhetoric based on the concept of totalitarianism was also a tactically brilliant move in the early years of the Cold War, for it allowed the advocates of liberal capitalism to build upon the pre-existing critique of fascism elaborated during the Second World War while redirecting its animus toward the Soviet Union and its allies.

Neither modernization theory nor the theory of totalitarianism fared well after about 1968. The generation of scholars who came of age in the late 1960s and early l970s largely rejected the assumptions of the Cold War and so were loath to credit a theory, like "totalitarianism," whose origins and purpose seemed so transparent. The turn from modernization theory was more complex and had less to do with the core of the argument than with what might be considered its corollaries, implications and predictions. An obvious corollary, though perhaps not a necessary one, was the notion that over time ideology became less salient and that mature polities were marked by less intense ideological debate and by less social conflict. The rise of the civil rights and antiwar movements in the United States and of the new left more broadly seemed directly to refute the claims about the "end of ideology." The resurgence of industrial conflict in the 1960s, particularly across Europe, likewise appeared to give the lie to accou nts that depicted social conflict as a temporary product stemming from the disruptions attendant upon the transition to industrialism [10] Equally significant was the failure of the main prediction derived from modernization theory: the convergence of social structures and political systems. Discerning the points of convergence between the United States and the Soviet Union was a major preoccupation of scholars influenced by modernization theory and over the years all sorts of similarities were alleged. But again and again, the systems failed to converge as hoped or predicted. The reforms of the Khrushchev era, for example, were succeeded by the rigidities of the Brezhnev period; similarly, liberal moves in eastern Europe were periodically reversed, their advocates purged or at least driven from positions of power. And the trajectory of the other major communist society, China, seemed until the death of Mao Zedong to be utterly distinct and confounding. Inconsequence, the scholarly consensus about both modern ization theory and totalitarianism was that neither provided a very useful framework for analyzing the past, present or future of industrial society as it had evolved in the west or in the east.

The consensus proved short-lived, however, and was deeply shaken up by the end of the Cold War and the collapse of socialism. Appropriately, both modernization theory and the theory of totalitarianism have made come-backs. There is surely great irony in the fact that as western scholars abandoned the notion of" to-talitarianism" as too crude and simplistic, a generation of scholars and dissidents within the Soviet bloc came to regard the term, and the concept, as essential to understanding the system under which they lived. For them "totalitarianism" captured an essential feature of the regimes that have now fallen: the aspiration to total control and, perhaps more important, the consequent destruction of "civil society," whose absence or distortion has been so often remarked upon by those assessing the long-term damage inflicted by "actually existing socialism."

Modernization theory has also been effectively resuscitated, though not always in its own name or with quite the bravado of earlier manifestations. [12] Nevertheless, the argument that modernity must surely come and that the advanced societies will come to approximate each other in critical respects has gained enormous credibility in the aftermath of the collapse of socialism. An early variation was Fukuyama's argument about the "end of history," which was never literally a claim that history had ended but rather an assertion about the range of alternatives to liberal capitalism. [13] Socialism, Fukuyama quite insightfully argued, had by 1989 if not before lost its ability to compete intellectually with liberalism: its arguments could no longer compel assent; its vision had ceased to inspire action or even acquiescence; and its application had proved disastrous. As a result, the intellectual foundations for alternatives to capitalism were absent and so, over time, more and more of the world would come to embrace liberal capitalism and to adopt economic and political regimes that would resemble, more or less, those of liberal capitalism. The claim, then, was not so much about history's end as about convergence, one of the corollaries of modernization. The major options to liberal capitalism had failed; to that extent the range of social choice was narrowed, constrained by the failure of the socialist experiment. Indeed, the ruling out of the major alternatives to the capitalist market would seem almost by definition to mean a convergence in the way states and societies organize themselves for economic activity.

The idea that modern societies are beginning to, or should ultimately, "converge" in their essential structures remains controversial, however, partly because it is empirically open to challenge and in part also because it runs counter to current fashions in historical and social-scientific analysis. For nearly two decades the trend in hisroriography has been away from "the social" and toward the study of culture--a move which privileges the particular and the deeply embedded; in the social sciences more broadly, the "linguistic turn" and the interest in cultural analysis have likewise dimmed the attractions of quantitative research and structural explanation. [14] Historians are especially resistant to the sorts of broad generalizations that mark modernization theory and hence to arguments about convergence. It might even be argued that historians have a strong occupational self-interest in insisting upon the uniqueness, specificity and irreducibility of local cultures and contexts. What point the detailed local study if it is merely illustrative and not of intrinsic interest--a case study of some broader phenomenon that can be glimpsed from on high or afar as well as up close or from below? Claims about convergence, therefore, have and will continue to meet with skepticism from a large contingent of scholars. Even Fukuyama, certainly not shy about his opinions or timid in expressing them, felt compelled to follow up his "end of history" with a book on Trust, aimed at revealing the divergent values that differentiate modern societies and produce greater or less amounts of social trust and thus provide more or less favorable environments for economic development. [15] Very few, it seems, are comfortable with the bald assertion of convergence.

The argument for convergence must also contend with the results of a large body of existing research comparing social structure, forms of economic organization, levels of economic performance, and political systems in the advanced nations. Here the task is complicated and confusing, for there are not only empirical results to sort through, but widely differing theoretical and methodological frameworks by which those results have been generated. Perhaps even more important, research on the differences between varieties of capitalism has clear implications for policy. In fact, much of the literature on comparative political economy has been inspired by the search for the most effective means of influencing economic or social policy. That goal has provided a strong incentive for emphasizing the dictinctiveness of national political systems and patterns of governance over the economy and for identifying mechanisms that might allow further interventions in the economy and in society. The same desire might transla te as well into an incentive to minimize or underestimate the common features of an increasingly globalized world economy. Much of the literature comparing capitalisms must therefore be read with these political sub-texts in mind. [16]

The literature laying out the case for convergence likewise deserves critical scrutiny, however. Here the problem would seem to lie in the very marked tendency of advocates for convergence to operate at such high levels of aggregation and over such long spans of time as to make their claims more or less untestable. Indeed, scholars who write about "the rise of professionalism" or "the coming of post-industrialism," for example, often seem to use these notions more as metaphors than as hypotheses that can be assessed, accepted or rejected. [17] Because they operate on a grand scale, they have the luxury of picking the cases that work and of choosing the spheres of life and labor in which convergence is most visible and of passing lightly and quickly over the local realities that stubbornly resist assimilation to a global or transnational pattern.

Still, the case for convergence would seem to be stronger now than ever before and the cumulation of stories, analyses and arguments for and against the notion suggests the value of at least some provisional assessment of where the argument rests. But how do the claims and stories add up or, more modestly, how can they be arrayed and organized so that their merits can be assessed, their relative weights established? In this essay the procedure will be initially to narrow the scope of the inquiry, which can easily be widened to include the entire world. The narrowing will occur along two dimensions. The first will be to assert that the issue of convergence carries very different meanings depending on whether the comparison encompasses merely the advanced societies or whether it brings in as well developing societies and those societies and economies making the transition from "actually existing socialism" to some variety of emerging market system, and to choose at the very outset to concentrate upon the exten t of convergence, or lack of it, within the more developed societies. The second strategy adopted to bring focus to the issue will be to confront directly the most plausible and compelling arguments for convergence and to look at the cases where it is most likely to exist. The logic is that if convergence cannot be found in the most likely venues, it is probably not to be found. If it is found there, it becomes at least plausible and worth examining in more detail.

Every interpretive strategy carries within it the seeds of its conclusions and it seems only fair to acknowledge that limiting the discussion to more genuinely comparable cases takes off the agenda what is surely the single most powerful argument for convergence: the impact of the collapse of socialism on the choice of rival paths to economic development. Indeed in this rather global sense the case for convergence is unanswerable. All countries must now operate within the global marketplace and conform to a greater or lesser extent to the dictates of the market. Autarchy and socialism are not possible, at least not if the aim is growth. Of course, there is room for debate about just what is required to allow participation in the world market, and it is clear that the market is relatively agnostic about how the inputs into world trade are generated--in terms of technology, labor force, the organization of firms, and so on; about how the proceeds of commerce are shared out; and about the political context of economic activity. The room for variation within economies is thus considerable, but it is nevertheless not as great as it would have been if rival, non-market, paths to development had proved viable. This is true both in the so-called developing world and in those nations making the transition from socialism to market economies, though in different ways. The formerly socialist countries look rather more like the advanced societies in terms of social structure, but they are only still in the process of creating cultures and legal systems compatible with the market and private property. The process is further complicated by the fact that for ordinary people in the failed communist societies decades of anti-capitalist propaganda were followed by an experience of primitive, quasi-criminal capitalist accumulation that in many ways confirmed the most dire arguments about the failures and inequities of the market. Resistance to the market is th erefore both historic and recent, based both on resentment and fear and also upon reason reflecting on experience. Developing economies, by contrast, tend to be more distinctive sociologically while also being marked by cultures and popular attitudes that are hostile or skeptical toward capitalism. But antipathy to the market in these settings is largely traditional, hence residual, and thus potentially more easily altered by experience.

Nonetheless, the differences between the advanced societies on the one hand and the developing economies and the economies in transition on the other, are of such magnitude that they really must be bracketed for purposes of assessing the extent to which modern capitalism produces convergence among social and political systems. The most relevant comparisons, then, are among and between the developed nations, all of which share a high level of national income, social structures with hefty middle classes and large numbers of professionals, economies heavily weighted toward manufacturing and services, and cultures that are on the whole not inimical to private ownership and capital accumulation. These shared traits coexist, and have long coexisted, with significant differences in the composition of industry, the shape of firms, the mode of industrial relations and the role of the state in the economy. The question of convergence, then, may be recast in terms of these shared and divergent traits: has the balance b etween traits common to these nations and characteristics that set them apart shifted over time to make them more alike? And if so, what has caused this change and is it likely to continue to assimilate distinctive national patterns to a common model, or is it likely that divergent patterns will persist?

To answer these questions comprehensively would require an enormous effort at data collection and analysis as well as an investigation into the sources of social change; and in view of the complexity of the issues involved, it is likely that even the most heroic empirical work would remain in the end unsatisfactory. What is more feasible--and hence the strategy of this essay--is to review some of the more recent literature that looks at these issues and to tease from it tentative answers to both questions. The question of convergence has been taken up most directly by scholars working in what might be called "comparative political economy" and, less directly, by those seeking to understand the dynamic and impact of globalization. The study of "comparative political economy" has been particularly interested in identifying models of economic and political organization and their implications for policy-making and for economic performance. The result has been a series of analyses that tend to fix upon a model th at seems to be working and to contrast its distinctive features with those of societies and economies that are performing less well. Again and again, therefore, Great Britain has been contrasted with other advanced economies--the German, the French, the American and, of course, the Japanese--and found routinely wanting. For many years the Japanese model was considered most worthy of study and emulation; and repeatedly scholars have found it useful to look at what the Germans, the Scandinavians or other Europeans--most recently it has been the Dutch--have done to engineer growth and social welfare. The point to many of these arguments was to identify opportunities for state intervention or possibilities for structural reform that might bring the lagging countries up to the standard of their competitors. Implicit also in these efforts has been the assumption that policies, structures and institutions matter greatly in determining economic performance and that markets, left to their own, would not do the trick. Hence it was generally assumed that what have been called "coordinated market economies," even when the coordination is effected primarily by and through business itself, are more successful than "liberal market economies" where coordination is achieved through the market. [18] It has therefore been very rare to find arguments of this kind that located the sources of superior economic performance in relatively free and flexible markets; hence, too, the most admittedly market-oriented economy, that of the United States, has rarely been seen as an exemplar.

The other body of literature that addresses the question of convergence, at least indirectly, is that which has focused upon globalization. [19] The fascination with the globalizing tendencies of the modern economy is intense and often uncritical, with scholars and policy-makers alike making use of the notion to explain all sorts of seemingly unrelated phenomena and to justify whatever policy or non-policy they wish defended. The global market, it is said, homogenizes taste and culture, it makes states and borders irrelevant and it imposes strict limits upon local variations in culture, social structure and economic policy. Such claims are often exaggerated. Nevertheless, the increasingly international character of economic activity does seem to have crossed a threshold that makes the impact of the world market more decisive, Indeed, during the first quarter century after the Second World War economic growth was generated largely by domestic demand or by trade among the more developed nations; since the 1970 s, by contrast, world trade has been a much more significant factor in determining which nations grow and which stagnate. [20] It is therefore possible now to argue that globalization has taken on a new edge: in the past the growth in trade and communications may have encouraged similar trends in culture, social life and economic organization by spreading knowledge and exposing ever larger sections of the world to prevailing and seemingly effective models of development. Particularly powerful was the transfer of technology from the more advanced to the less advanced economies which, by itself, should have ensured a growing convergence of productivity. [21] In the 1980s and 1990s, however, the world market began to speak with even more authority. It now forces domestic producers to compete with foreign producers making use of both the latest technologies and favorable supplies of raw materials and labor. This means that social compacts reached between labor and capital in one or another advanced economy have b een reopened, challenged and disrupted; while social protections which reduce labor market flexibility have increasingly been found to be uneconomical. To put the matter very crudely, the globalizing tendencies of capital worked in the past largely by emulation and diffusion. Now they compel.

Interestingly, arguments derived from these two distinct bodies of research and analysis have recently crystallized around a novel hypothesis that links globalization to a new appreciation of what has come to be called the "Anglo-American model" of post-Fordist development. [22] Because of this, assessing the case for an emerging "Anglo-American model" provides, then, an opportunity simultaneously to review the key insights of comparative political economy and of work on globalization and to test out one of the more provocative ideas on offer about the present and future of "post-industrial society." The logic is starkly simple: as economic life becomes increasingly global, the most effective national economies are those which are, comparatively speaking, most open and most flexible and which give to capital the widest range of options and impose upon it the fewest demands and constraints. The United States has long been regarded as the advanced society most hospitable to capital; but since the triumph of Th atcherism and the implementation of Thatcher's program, the United Kingdom seems to have come more and more to resemble the American pattern. The focus upon the viability of the Anglo-American model, however simple the argument, represents a major reversal in the understanding of comparative political economy. In the past, students of political economy implicitly ruled out the market--left on its own--as an effective steering mechanism and searched instead for institutional structures and policy options that could compensate for market failure as the means of improving economic performance. [23] The grouping together of the United States and the United Kingdom as sharing a common set of features governing economic behavior is likewise a reversal of much of the lore and literature comparing the apparently divergent histories, politics and patterns of social organization of the two nations. Indeed historians, and social historians especially, must inevitably look upon the argument about the Anglo-American model with some suspicion, both as a description of social reality and, even more, as a prescription for other developed nations.

There is, of course, a large literature comparing Britain and the United States, and the two nations obviously share a cultural and political heritage that marks them off from other advanced societies. [24] Intercourse and exchange between Britain and the United States have been, moreover, constant and critical, and they have occurred at the very highest social levels; and the two countries have chosen to be each other's best ally in the geopolitical conflicts that have dommated international relations in the present century. [25] Nevertheless, the differences between the two societies have been equally striking, and particularly so in matters of political economy. After the Second World War in particular, Britain was regarded as a model welfare state in which government was committed not only to social provision but to steering the economy toward full employment. The United Stares, by contrast, has been the model of a modern economy that operated with little government interference, with minimal social prov ision, with relatively weak unions and with very few fetters upon business. The contrast was probably drawn too starkly even when it was most true. Still, the key set of relationships whose varying configuration matters most to the governance of the economy--that among business, labor and the state--does appear to have taken shape and evolved in markedly different terms in the two societies. [26] Equally important, the economies of the United States and Great Britain and their respective patterns of development have differed significantly as well. [27]

The argument thus raises a major empirical question about whether for some reason or another these two advanced societies have come to resemble each other more closely in recent decades; and a second, more speculative and interpretive issue of whether, if they are indeed now more alike than different, they constitute a model worth emulating. The evidence for a growing similarity along key dimensions of social and economic structure is considerable. Britain has become more like the United States in the role of the state in the economy and hence in the character of markets; in education and social policy; in the relative power of trade unions and in the resulting flexibility of labor markets; in the role of the service sector in the economy and especially in economic growth; and in the organization of firms and the style of management. In these critical respects, the political economies of Britain and the United States have converged. What is most striking about the convergence, however, is that it has not bee n a 'natural' or evolutionary process but rather the consequence of a series of wrenching and willful choices. Social change is, of course, never literally 'natural', for it always begins with legacies that embody prior social choices and proceeds with repeated opportunities for further choice. Still, some patterns of development are clearly more dramatic than others and more obviously a product of deliberate policy than of impersonal and uncoordinated evolution; and, more important, every choice made in the past simultaneously rules out certain later opt ions while opening up others.

Take, for example, the changing role of the state. [2]8 For the entire postwar era the United States has maintained a relatively small public sector, low levels of expenditure on social services, and comparatively low rates of personal taxation. In Britain, by contrast, taxes were high and growing until the late 1970s, as was public spending. The state sector was quite large and the state owned a large share of the nation's housing stock and several of the major industries. Under Thatcher, much of this changed: income taxes were slashed, especially on the well-to-do; and spending was gradually brought under control. Equally significant, the state privatized housing and denationalized one industry after another. When Labour returned to power under Tony Blair in May, 1997, most of these changes were accepted as a permanent part of the social and economic landscape. But this massive transformation did not simply evolve; it was forced on Britain from above by a government that never gathered as much as 45% of th e popular vote. Even if specific Conservative measures and policy stances had a large constituency--e.g., the sale of Council housing or the resistance to the unions-there was never a mandate for the systemic transformation wrought by the Thatcher governments.

Virtually all of the other structural alterations that brought Britain more in line with American patterns were equally contested; they constituted not a further working out of existing social trends but a reversal of previous developmental tendencies. Changes in education, for example, were hardly consensual: higher education was expanded dramatically, but very much on the cheap and thus with existing institutions and their leaderships largely resisting; while the effort to impose a new national curriculum was undertaken largely in the face of widespread opposition from teachers and administrators. Indeed, Thatcherite educational reform meant the literal abolition of the political bodies--the local education authorities (LEAs)--that had been responsible for schooling in most urban areas. Massive opposition from local authorities, from unions and from other interests also attended the privatization of housing and of industry.

Less 'natural' still was the path that led to the weakening of Britain's trade unions. Comparison with the U.S. record is especially instructive. [29] American unions had secured representation in the major industries by 1945 and represented at the time roughly a quarter of workers. As a result of several bitter strikes they largely abandoned attempts to influence the shop floor or the direction of industry in the late 1940s, but their numbers continued to grow as the economy grew, at least until the late 1960s. Gradually, however, the fact that growth occurred largely outside the industries already unionized or in regions where unions were historically feeble meant that from the 1970s unions began to weaken. By the 1990s, the major source of strength for unions in the U.S. was in the public sector, where political pressure could be brought to bear on governments to recognize unions. But the unions' clout in private industry declined precipitously. Although these trends were aided by adverse government polic ies--e.g., by the Reagan government's crushing of the air traffic controllers (PATCO) strike and by the erosion of legal protections at the federal level-- they were mostly the result of regional and sectoral shifts in employment coupled with steady management resistance.

In Britain, by contrast, the transformation was more conscious, abrupt and even violent. The British labor movement had, like its counterpart in the United States, secured its role as bargaining agent in the major industries by the end of World War II and as of the late 1940s represented roughly four in ten British workers. From that position of strength it grew in at least two dimensions: first, their industrial clout ensured the unions a role, at least a veto, in the corporarist style of policy-making adopted by successive governments from the 1940s to 1979; and second, the broad acceptance of the unions' role in setting wages and handling grievances allowed unions to grow in numbers even as the major industries, like coal and textiles, began to shed workers. By the 1960s, British unions had made substantial gains in the organization of white-collar workers and in the public sector and in the 1970s the share of union members in the workforce rose to just over half. Thereafter, however, the unions suffered a series of defeats at the hands of a government determined to curb their power and aided in the task by massive unemployment and the fear of job loss. The first major defeat was in steel in 1980; far more traumatic was the crushing of the miners' strike in 1984-85. The Thatcher government also turned decisively against the practice of routinely consulting unions on matters of policy and forced unions to get what they could by bargaining. But government and employer hostility, backed up by a highly adverse labor market, meant that unions lost bargaining power and members. Union membership stood at 13.2 million in 1979; by 1998 it had fallen to 7.8 million, and trade unions spoke for just 30% of the workforce. The change was dramatic and meant, in fact, that Britain went from having a labor market governed largely according to agreed-upon rules and by institutions committed to enforcing them to having what the current government claims is one of the most flexible labor markets in the advanced societies or, les s euphemistically, a "relatively cheap, easily disposable and segmented workforce." [30]

Even seemingly faceless and aggregate changes in the distribution of economic activity involved choice and controversy rather than the simple extension of social and economic trends. The most notable shift in the structure of the economy in the developed nations has been the move toward the service sector. Across the range of OECD countries, the share of the labor force engaged in services grew from 49.2% in 1970 to 59.9% in 1995; while the European average increased from 42.8% to 51%. The United States and Great Britain have been very much in the lead in this move: by 1995 the share of service sector employment had reached 73.3% in the U.S. and 70.5% in the UK; by that date, moreover, services accounted for over 71% of "value added" in the GNP of both nations. [31] Not surprisingly, the U.S. and the U.K. compete far more effectively in services than in industry. According to one study, the United States could boast of 44 "internationally competitive" service industries in the 1980s and the U.K. 27, compared to only 7 for Germany. On the other hand, Germany was home to 46 "internationa lly competitive" machinery industries, while the U.S. and U.K. together housed only 35 (17 and 18 respectively). [32]

There has thus been a strong convergence around the concentration on services in Britain and America. But the two nations arrived at this point through highly divergent routes. The United States, for example, was already the pioneer in service industries in the l970s and the continued growth of services in the U.S. occurred as part of an overall expansion in the economy and the labor force. Between 1970 and 1995, therefore, the labor force in the United States grew by nearly 59% (more than double Japan's rate of 27%). So while 43.2 million workers were added to the service sector, 3.9 million more got jobs in industry as well. In Britain, by contrast, total employment grew by merely 4% over the entire quarter century. More significant still, the addition of 5.5 million service workers was accompanied by the outright loss of over 3.8 million jobs in industry. Great Britain thus achieved its focus upon services by shrinking the industrial labor force and virtually abandoning entire areas of manufacturing. Doin g so, moreover, was a deliberate choice made by successive Conservative governments. Left to its own, British industry might well have contracted when faced with international competition, but it was not left to its own, Rather, the state chose to run down those sections of Britain's basic industries which it controlled directly and sought to expose the rest to stiff competition. What survived was leaner and meaner, less well-paid, and less well-organized by unions. In sectoral terms what remained were largely services. The predominance of service sector employment in Britain and the United States has profound consequences for social structure, income inequality, demography and gender--issues which are typically treated as reflecting or embodying long-term secular trends in the advanced societies. [33] In fact, the route to an economy heavily oriented toward services was, at least in Britain, largely a deliberate choice. Whether the choice was made with an awareness of the social consequences is, of course, a nother matter; but it is clearly the case that the choice to deindustrialize was made with a thorough understanding of who would lose in the new economy.

The transformation of British firms and their management was likewise far from a smooth process. The question of the structure of capital and its style of operating within firms and within society inevitably looms large in any comparison between the political economies of the advanced societies. [34] Workers, after all, have little choice but to accept the jobs on offer and little input into their design or into the shaping of the firms within which they are found. Even states find themselves forced to respond to the initiatives of capital and only occasionally capable of guiding or preempting the decisions of investors. It matters a great deal, then, whether capital is organized in large or small aggregates, whether it is invested at home or abroad, whether the control of industry is exercised by managers, bankers or share-holders, whether share-holding is dispersed or concentrated and whether shares are held by individuals or institutions, and whether investors choose to take their returns over the long te rm or the short term. Although the British and American economies are now often spoken of jointly as "liberal (or uncoordinated) market economies," the patterns of ownership and control and the styles of management typical of the two nations have long differed. The United States pioneered the large, monopolistic or oligopolistic firm in the late 19th century. The trend was so pronounced as to provoke major public concern that led, in turn, to the adoption of serious anti-trust legislation which forced companies to be more responsible to share-holders and to evolve more transparent styles of accounting, ownership, and management.35 Firms remained large, of course, but they developed more distinctly corporate forms of governance and organization. Management became highly professional, more aggressive and more self-conscious of its status and prerogatives. In Britain, on the other hand, firms remained smaller and less heavily capitalized and management less professional and more amateurish, less highly regarded as an occupation and consequentially less self-confident and aggressive in its posture. British and American firms also had different relationships to financial markets. U.S. firms were often publicly held and traded, although high profits meant that in good times they were largely self-financing and hence relatively independent of stockholders. British firms were more often privately held and financial markets were less interested in industrial investment than in other types of activity. All in all, the structure and management of firms differed considerably between the two nations, at least into the mid-20th century.

Change came fitfully thereafter and ultimately required the decisive intervention of the Thatcher government to bring about the convergence that is evident today. Despite compromises with labor unions and with government, U.S. corporations retained great autonomy and discretion through the postwar era. The main threat to their ability to run their own affairs unconstrained by social concerns came in the 1960s with the intrusion of the state into employment practices on behalf of the civil rights of women and minorites and in the 1970s with the elaboration of environmental regulations. But business organizations quickly mobilized and fought back, effectively eroding the state's power or desire to intervene during the 1980s. [36]

British business enjoyed far less success in keeping the state out of their affairs. On the contrary, the government routinely interfered with business from the 1940s through the 1970s and, in the process, further weakened the clout and resolve of management. What appears primarily to have sapped the will and limited the capacity of business to think and act on its own behalf was the pattern of relationships established during and after the war between business, the state and the unions. Put very simply, business was placed very much on the defensive during the war and forced to accept regular interference from government and to acquiesce in a much enhanced role for the unions in negotiating the terms and conditions of employment. Underpinning this restructuring in the balance between business, unions and government was the politics of "people's war" and war mobilization. From early on in the war business was seen as part of the establishment whose passivity had brought the nation to the brink of defeat in w ar and business inefficiency came to be seen as hampering the war effort and hence as unpatriotic. It became the duty of business and of workers to adopt the most efficient techniques in the interest of winning the war. In response, the war-time government undertook a variety of efforts to propagate the most advanced management techniques.

The effort to reform management continued after the war, as the Labour governments of 1945-51 sought to raise productivity in order to boost exports. The critique of management as inefficient was particularly appealing to Labour and led ministers to pressure business into planning, into discussions of regional and industrial development, and into participation in the Anglo-American Productivity Council, an offshoot of the Marshall Plan. The chief enthusiast in the government was Sir Stafford Cripps and in 1947 he was instrumental in setting up, with Treasury financial support, the British Institute of Management. Since the initiative for progressive management came from government and, in particular, from those critical of the role of business and capital in society, however, businessmen were almost inevitably suspicious and defensive, and in many cases they turned against innovations in management and in management thinking, as well as against the consultants who prescribed them and the officials who backed them. [37]

By the 1950s, therefore, the movement to reform management was supported by government, by consultants and enthusiasts for scientific management, by an emerging generation of social scientists and by enlightened public opinion, but not by business. [38] With order books full, businessmen had little time for critics and were concerned to keep government and the unions at a distance. But by this time the pattern of tripartite bargaining had become well-established and so employers found themselves enmeshed in a host of consultative mechanisms with representatives of government and the unions. [39] Both government and employers were eager to hold down wages, but they feared confrontation and were unwilling to contemplate the sort of deflationary policies that had worked so well, but at such a heavy social cost, between the wars. In consequence, the state sought to work closely with the unions on a wide variety of issues in the hope of gaining union cooperation in wage restraint. The implicit assumption behind s uch "corporatist" consultation was that change required the agreement of all three parties: workers, managers and the state. The loser in this emerging formula was management which, absent these constraints, would otherwise have had the authority to set wages and to organize production more or less as it saw fit.

The impetus for management reform remained fairly weak during the 1950s, however, but during the late 1950s and 1960s concern about Britain's lagging productivity grew. [40] The vogue for "planning" was one manifestation; a renewed sense that management needed restructuring and revitalization was another; and curiously, the two rather distinct agendas were frequently merged. [41] Thus the economic planners in the Department of Economic Affairs, set up in 1964 to create a National Plan and to oversee its implementation, were keen on recommending consultants who would revamp the structure and culture of management. Again, however, the impetus had come from outside business and it was assumed that change must be mutually agreed among business, management and the unions. Indeed, with the setting up of the National Economic Development Council (Neddy)--and a series of little Neddies for specific industries--the tripartite model became even more thoroughly entrenched across industry and throughout the United Kingd om. So management was set to talking about reform and about how to increase productivity, but on the assumption that most of the fault with the nation's economic performance lay with business, and only within the constraints of "triparrism." The predictable outcome was endless rounds of inconclusive discussions, repeated exhortations on behalf of increased productivity and more rapid innovation, and very little change. To the extent that change did occur in the 1960s and 1970s, moreover, it owed little to the efforts of British managers, union leaders or policy-makers and more to the impact of U.S. investment or American consultants. [42]

So long as the economy grew, even if more slowly than Britain's competitors', the stalemate over productivity and management reform was tolerable. But the economic difficulties of the 1970s utterly discredited postwar styles of policymaking--both Keynesian macroeconomic policy and supply-side interventions governed by the assumptions of tripartism. The parties to corporatist bargaining were, however, too deeply enmeshed to withdraw and too thoroughly implicated to draw from its failures the lesson that it did not work. And so change came from without, from the top, from a new Conservative government run largely by a group of outsiders who had seized control of the party after a period of abject failure in government and who came to the task armed with a free-market ideology that had grown up on the margins of respectable opinion. [43]

It was thus only with the victory of Margaret Thatcher that conditions altered sufficiently to allow management to evolve a new, more aggressive outlook and set of practices. The Thatcher government tamed the unions, forced weak and inefficient companies to the wall, dismantled the institutional framework for corporatist bargaining and itself began to articulate a theory of entrepreneurship that could inspire business. [44] Thus aided, business began to find its voice and to adapt management structures and attitudes to the exigencies of a more globally competitive environment. But the transformation occurred with little genuine enthusiasm, and some real resistance, on the part of the organized business community. The contradiction produced a famous clash between Thatcher and the Confederation of British Industry (CBI). Sir Terence Beckett, the new director of the CBI and chairman and chief executive at Fords, told the annual conference in November 1980 that it was "time to take the gloves off. We are in a ba re-knuckle fight" with government on behalf of industry. The speech was aimed directly at the government's extremely austere fiscal stance and its almost fanatical adherence to monetarism. Two days later Beckett was summoned to 10 Downing Street, where he met with Mrs. Thatcher and emerged cowed and chastised. "She's a lovely lady," Beckett told reporters afterwards, and "she was magnificent." [45] In short, Thatcher decisively altered the conditions within which business operated and made it possible for management to adopt the sort of aggressive stance typical of business in the United States, but the government did so not at the prodding of business but as a matter of ideology. Change came, then, but it did not evolve logically or 'naturally' out of prior patterns, relationships and structures. On its own and prior to Thatcher, in fact, British management had singularly failed to modernize itself or even to develop the understanding needed to initiate the process.

Whether these changes have been sufficiently institutionalized that they will persist under a different political regime may well be argued. The main reason to believe they are relatively permanent is that the structure of industry itself has changed and the relative weight of industries with strong unions and traditions of corporatist bargaining has been much diminished since 1979. Even before Thatcher and the transformation of outlook she initiated and represented, British industry was slowly beginning to take on the formal shape of business in the United States. The 1960s witnessed a major merger movement, for example, and most mergers were followed by the adoption of the "multidivisional" form of organization typical of large American firms. [46] Reorganization was often carried out with the help of U.S. consulting firms, McKinsey in particular, and increasingly the management ideologies popular in the U.S. began to find their adherents in Britain. The effective "bite" of such innovations was minimal dur ing the 1960s, but the infrastructure for a new management ethos began to be put in place. With the onset of slow growth in the 1970s and the imposition of deflationary policies by the Thatcher government, tougher management came to be in greater demand and the quasi-natural selection wrought by slow growth and intensified international competition meant that companies with leaner and meaner managements had a better chance of survival. This shift was reinforced by the increasingly international character of British business. British businesses began to be increasingly active overseas, especially in America, and were thereby encouraged to adopt management styles and structures suitable for that environment. At the same time, Britain became a major site for direct foreign investment. In fact, 40% of the American and Japanese investment in Europe went to the U.K. British firms were thus forced to compete directly on their own soil with more efficiently managed foreign firms. Taken together, these changes in indu strial structure and practice made the parallel adoption of more aggressive and modern approaches to management more widespread. It would seem, then, that they are likely to persist, even under a "New Labour" government.

On a whole variety of measures--most related to social and economic structure--Great Britain and the United States would therefore seem to have converged. But the two essential caveats have to be recognized and probed before the implications of Anglo-American convergence can be reliably explored. The first is the extent to which social change in Britain has been orchestrated from above and in accordance with ideology, not with the dictates of the market or the incremental evolution of institutions. At the very least, then, Britain's approximation to a neo-liberal or "uncoordinated" type of market economy is of recent vintage and for that reason its performance cannot easily be measured. Britain grew modestly during the late 1980s, but from such a shrunken base of economic activity that it would have been virtually impossible not to grow. Its recent performance is more impressive: Britain recovered from the recession of the early 1990s more quickly and fully than other European countries and its record in t erms of employment has begun to resemble that of the United States more than that of its neighbors and competitors in Europe. Thus as of late 1998 the rate of unemployment in Great Britain was just 4.6%--quite comparable to the American level of 4.3% and the Japanese rate of 4.4% (which was, of course, abnormally high)--and much better than Germany's 10.8% or France's 12%. [47] It is possible that the very recent success of the British economy indicates that it has found a clear niche and a viable strategy for competing in the world economy, but that will have to be tested over time and against the unique challenges that confront the British economy. Great Britain is not, after all, a continental economy with enormous internal potential to generate growth both within the world economy and outside of it, but rather a small island more or less fully exposed to the rigors of international competition.

The second essential caveat is that the evidence for an Anglo-American convergence comes mostly from an examination of trends in the economy, in the relations between state and society, in gross trends in employment and social structure, and in a selected range of social and economic policies. [48] Britain and the United States nevertheless remain different societies, with substantial variation in culture and society. Consider, for example, the debate on social capita and civic culture. A compelling case has been made that the United States, for all is democratic trappings and the demotic character of its popular culture, increasingly lacks the infrastructure of association that generates social trust and allows ordinary men and women to interact, to develop stable loyalties and political orientations, and to participate effectively in public life. The atrophy of civil society, captured evocatively in Robert Putnam's phrase about the habit of "bowling alone," has been accompanied by a rise in shallow and shi fting virtual communities and of constructed and evanescent publics invoked from on-high around specific issues. These communities or publics, it is argued, are typically shaped by mass media and offer a decidedly superficial and minimalist means of participating in the life and times of the nation. In Britain, the evidence seems to suggest, these trends seem much less marked and social life is much richer and more complexly networked and embedded. People watch television in Britain, but not to the exclusion of more meaningful kinds of social interaction; likewise, citizens display a certain cynicism toward politics but within a context of greater participation and a much enhanced understanding suggesting a political culture that retains meaning, emergency similegiance and the sense of choice. [49]

So the extent and the depth of convergence are limited. Still, the emerging similarities in the British and American economies, their shared orientation to services and ability to compete internationally in what is transparently the expanding sector of the economy, together with the increasingly common style of British and American management and industrial relations, reinforced as they are by similar philosophies of economic policy-making, do add up to a powerful examplar of a new sort. For a very long time, Great Britain was the world's most developed economy and the nation with the longest history of capitalist enterprise, but it was seldom considered by others to be a model worth emulating. The British lead and its dominant position in the world economy faded in the late 19th century and ended by 1914, as the United States emerged as the economic and, ultimately also the political, hegemon in the mid- and late-20th century. But it, too, was seldom regarded as a model, despite U.S. efforts to export its o utlook and institutions during the Cold War. Indeed, America's domination of the world economy inspired more resistance and criticism among elites, policymakers and academic analysts than it did imitation or advocacy. For all sorts of reasons--some quite legitimate but some perhaps a bit self-serving--it never became fashionable to be a booster of the American, or now Anglo-American, style of capitalism. [50]

Whether that might change as the American, or Anglo-American, pattern of growth and development proves itself more viable in an increasingly competitive world market will depend in the first instance on the comparative performance of the two major "uncoordinated, liberal market economies" versus the record compiled by the more "coordinated market economies" of the Continent and Japan. Assuming that the two economies continue to perform at or above the level of their rivals, there are likely to be recurring calls for the more "coordinated" economies to adopt more liberal policies. Defenders of the Japanese and continental European (or, in one formulation, 'Rhenish') models have already begun to concede their flaws and limitations and admit the need for modification. [51] More importantly, business elites and bankers in Germany and France have clearly begun to be swayed by the arguments for something like the "Anglo-American" model and to withdraw their support from the social and labor policies that underpin the political economy of most European states. [52] Nevertheless, the fact that it is business and its allies who have shifted their positions probably undermines popular support. In fact, it would seem to matter greatly which actors decide to rally behind the liberal model and which groups array themselves against it. Already, for example, the French labor unions have come out against "the Anglo-American model" because they fear its impact on wages and social protections and because their domestic opponents--business and the parties of the right--support it. If efforts to make labor markets more flexible are put on the agenda of high politics by the traditional opponents of labor, they will undoubtedly meet a hostile response. But if they become the property of parties like Labour, or "New Labour," in Britain or of the SPD in Germany, they have a somewhat better chance of succeeding. Still, parties of the left contain within their ranks many who would lose in the short term if old policies were abandoned and so may be institutionally unable to move in a liberal direction. On the other hand, resistance is also likely to be generated if the model seems to be imposed from without: moves like the so-called "structural impediments initiative" adopted by the United States as a bargaining tactic in trade policy and aimed explicitly at opening up the Japanese economy and making it more like the United States seem particularly designed to elicit domestic opposition.

Even if the argument for opening up the "coordinated" economies becomes utterly compelling and the case is taken up by parties and politicians of the center-left, the chances of the "Anglo-American" model generating a significant level of popular support remain slim. The reason is that central to the liberal approach are the constraints it places on the range and capacity of the state and the difficulty of selling that stance to a democratic public. As the political philosopher Brian Barry has argued, the dilemma facing politicians "whose primary commitment is to the market" is "how to get democratic approval for tying the hands of government...." Almost inevitably, political projects aimed at pushing back the frontiers of the state, allowing greater play for markets and forcing open labor markets tend to be rare and the opportunity for success ordinarily short-lived. The Thatcher phenomenon was in this respect characteristic: it was possible only because the alternative had been so thoroughly discredited an d it lasted long enough to make an impact only because the opposition was split. So however firmly anchored Thatcher's policies now seem, the conditions that allowed for them to be implemented and consolidated were fleeting and utterly unique. And yet the very creation of the British component of the "Anglo-American" model depended on these unusual circumstances. Ironically, then, the emergence of what purports to be a model rooted in economic necessity was, like so much else, first and foremost a product of politics. Despite the unique conditions that attended its creation, the "Anglo-American" model represents a pattern of economic and social development and a vision of the future likely to have a significant and long-term impact both in the United State and Britain and in those advanced nations forced to compete with Britain and America.

ENDNOTES

The discussion of an Anglo-American model is diffused throughout several distinct literatures involving comparative political economy, industrial sociology, and business history. For that reason lam especially grateful to colleagues who have served as guides to material that might easily have eluded me: especially Lou Ferleger, Leslie Hannah, Jim Shoch, Nick Tiratsoo and Jonathan Zeitlin. I also appreciate David Vogel's willingness to discuss the politics of business. I want as well to thank Laura Frader, Jim Obelkevich and Larry Wolff for patient and thoughtful discussions of the arguments of this essay. An earlier version of this article was presented to the History Department Seminar at Boston College. I want to thank my colleagues for their helpful suggestions, and especially Prasannan Parthasarathi and David Quigley, the organizers of the seminar series.

(1.) On the disorienting effect of the ending of the Cold War on the study of international relations, see John L. Gaddis, "International Relations Theory and the End of the World War," International Security XVII, 3 (Winter, 1992--93): 5-58.

(2.) The effort to lay out the contours of the post-Cold War international system has been extensive but not terribly fruitful. For the most recent effort, see Thomas Friedman, The Lexus and the Olive Tree: Understanding Globalization (New York, 1999).

(3.) This argument is made more fully in James Cronin, The World the Cold War Made: Order, Chaos and the Return of History (New York, 1996).

(4.) A fundamentally agnostic book like Charles Lindblom's, Politics and Markers: The World's Political Economic Systems (New York, 1977), would thus be much more difficult to write since 1989.

(5.) The classic argument along these lines was Alexander Gerschenkron, Economic Backwardness in Historical Perspective (Cambridge, MA, 1962).

(6.) The effort to portray Soviet politics as somehow pluralist was inevitably lame and strained. But see, for example, Jerry Hough's description of the Soviet system as "institutional pluralism" in Hough & Merle Fainsod, How the Soviet Union Is Governed (Cambridge, 1979). An application of the argument concerning "modernization," in this case labelled "urbanization"--was Moshe Lewin, The Gorbachev Phenomenon (Cambridge, 1988).

(7.) Walt W. Rostow, The Stages of Economic Growth (Cambridge, 1960).

(8.) For a recent rendering of 20th-century European history that takes seriously the idea that the triumph of liberal democracy was highly contingent, see Mark Mazower, Dark Continent: Europe's Twentieth Century (New York, 1999).

(9.) The most recent account of the theory's origins, permutations and uses is Abbott Gleason, Totalitarianism: The Inner History of the Cold War (New York, 1995).

(10.) Colin Crouch and Alessandro Pizzorno, The Resurgence of Class Conflict in Western Europe (London, 1978).

(11.) See Martin Malia, The Soviet Tragedy: A History of Socialism in Russia, 1917-1991 (New York, 1994), 13-14; and Gale Stokes, The Walls Came Tumbling Down (New York, 1993).

(12.) See, for example, Adam Przeworski & Fernando Limongi, "Modernization: Theories and Facts," World Politics IL 2 (January, 1997): 155-183, who treat the theory with appropriate critical respect and use it to formulate testable propositions about the relationship between democracy and development.

(13.) Francis Fukuyama, The End of History and the Last Man (New York, 1992). Fukuyama's original article in The National Interest appeared the summer of 1989.

(14.) For an elegant exposition, see William Sewell, "A Theory of Structure: Duality, Agency and Transformation," American Journal of Sociology IIC (July, 1992): 1-29.

(15.) Francis Fukuyama, Trust (New York, 1995).

(16.) Susan Strange, "The Future of Global Capitalism; or, Will Divergence Persist Forever?" in Cohn Crouch & Wolfgang Streeck, eds., Political Economy of Modern Capitalism: Mapping Convergence and Diversity (London, 1997), 182 and ff.

(17.) See, for example, Harold Perkin, The Third Revolution: Professional Elites in the Modern World (London, 1996): and, for one of the earliest iterations of the argument about post-industrialism, Daniel Bell, The Coming of Post-Industrial Society (Harmondswroth, 1973).

(18.) This distinction has been defined and elaborated most forcefully by David Soskice in a series of important essays. See, in particular, "Divergent Production Regimes: Coordinated and Uncoordinated Market Economies in the 1980s and 1990s," in Herbert Kitschelt, Peter Lange, Gary Marks & John D. Stephens, eds., Continuity and Change in Contemporary Capitalism (Cambridge, 1999), 101-134 and also Peter Hall and David Soskice, eds., Varieties of Capitalism: The Institutional Foundations of Comparative Advantage (forthcoming).

(19.) The literature is quite extensive. For a review, see Jonathan Perraton, et al., "The Globalization of Economic Activity," New Political Economy 11, 2 (1997): 257-277; and David Held, Democracy and the Global Order (Stanford, 1995). For the most extreme version of the argument, see Kenichi Ohmae, The End of the Nation State (New York, 1995). For a discussion of convergence over the very long term, see Jeffrey Williamson, "Globalization, Convergence and History" Journal of Economic History LVI, 2 (June, 1996): 277-306.

(20.) Robert Brenner, "The Economics of Global Turbulence," New Left Review # 229 (May-June, 1998).

(21.) See especially W.J. Baumol, ed., The Convergence of Productivity; & Baumol, "Productivity Growth, Convergence and Welfare: What the Long Run Data Show," American Economic Review LXXVI (1986): 1072-1159. For a critique that suggests that productivity may converge at the level of the whole economy while remaining quite different in manufacturing, see S.N. Broadberry, The Productivity Race: British Manufacturing in international Perspective, 1850-1990 (Cambridge, 1997), 69-73. The coincidence of these seemingly contradictory trends is made possible by the fact that economies adjust to long-run differences in industrial productivity by enlarging or shrinking particular industries and sectors and attaining, or re-establishing, a measure of comparative advantage at the level of the entire economy.

(22.) The strongest statement is Michel Albert, Capitalism vs. Capitalism (New York, 1993). Albert was concerned mostly with the United States, but others have discussed the United States and the United Kingdom together. See, for example, Suzanne Berger & Ronald Dare, eds., National Diversity and Global Capitalism (Ithaca, 1996); and, for a more dramatic account, Daniel Yergin & Joseph Stanislaw, The Commanding Heights: The Battle between Government and the Marketplace That Is Remaking the Modern World (New York, 1998).

(23.) Hence the emphasis on "governance" and "embeddedness" in a series of comparative works: e.g. J. Rogers Hollingsworth, Philippe Schmitter & Wolfgang Streek, eds., Governing Capitalist Economies: Performance and Control of Economic Sectors (New York, 1994); Hollingsworrh & Robert Bayer, eds., Contemporary Capitalism: The Embeddedness of Institutions (Cambridge, 1997); John Campbell, Hollingsworrh and Leon Lindberg, eds, Governance of the American Economy (Cambridge, 1991); and, most recently, Kitschelt, et al., Continuity and Change in Contemporary Capitalism.

(24.) David Englander, ed., Britain and America: Studies in Comparative History, 1760-1970 (New Haven, 1997), is the latest entry, but there have been many earlier efforts. The clearest connections have been in the sphere of politics and political culture. Indeed, the history of the American Revolution cannot be written except in terms of a shared political discourse elaborated in a genuinely trans-Atlantic conversation. The extent to which the political cultures of the two nations have been in contact has fluctuated since that time, however. For an argument about the broad patterns and a thoughtful examination of a period of especially intense interchange, see Daniel Rodgers, Atlantic Crossings: Social Politics in a Progressive Age (Cambridge, MA, 1998).

(25.) Christopher Hitchens, Blood, Class, and Nostalgia: Anglo-American Ironies (New York, 1990) surveys the cultural contacts between British and American elites; while Wm. Roger Louis & Hedley Bull, eds., The 'Special Relationship': Anglo-American Relations since 1945 (Oxford, 1986) review the "special relationship" in international affairs.

(26.) See, among others, Mary Furner & Barry Supple, eds., The State and Economic Knowledge: The American and British Experiences (Cambridge, 1990); as well as David Vogel, National Styles of Regulation: Environmental Policy in Great Britain and the United States (Ithaca, 1986); and Michael Useem, The Inner Circle: Large Corporations and the Rise of Business Political Activity in the United States and the United Kingdom (New York, 1984); Alfred D. Chandler, Jr., "The Growth of the Transnational Firm in the United States and the United Kingdom: A Comparative Analysis," Economic History Review XXXIII (August, 1980); Derek Channon, The Strategy and Structure of British Enterprise (Boston, 1973); William Lazonick, "Strategy, Structure and Management Development in the United States and Britain," in K. Kobayashi & H. Morikawa, eds., Development of Managerial Enterprise (Tokyo, 1986), 101-146; and Lazonick and Mary O'Sullivan, "Finance and Industrial Development: Part I: the United States and the United Kingdom," F inancial History Review IV (1997): 7-29. A more skeptical view is found in B.W.E. Alford, "Chandlerism: The New Orthodoxy of US and European Corporate Development," Journal of European Economic History, XXIII (1994): 631-643; and in Leslie Hannah, "The American Miracle, 1875-1950, and After: A View in the European Mirror," Business and Economic History XXIV,2 (1995): 197-263.

(27.) The classic statement is H.J. Habakkuk, American and British Technology in the Nineteenth Century (Cambridge, 1962). See also P.S. Bagwell & G.E. Mingay, Britain and America, 1850-1939: A Study of Economic Change (New York, 1970), and the management literature cited above.

(28.) This paragraph is based largely upon my book, The Politics of State Expansion: War, State and Society in Twentieth-Century Britain (London, 1991). See also Desmond King and Stewart Wood, "The Political Economy of Neoliberalism: Britain and the United States during the 1980s," in Kitschelt, et al., eds. Continuty and Change in Contemporary Capitalism, 371-397.

(29.) See, among others, Robert Zieger, American Workers, American Unions, 1920-1085 (Baltimore, 1986); Christopher Tomlins, The State and the Unions: Labor Relations, Law and the Organized Labor Movement in America, 1880-1960 (Cambridge, 1985); and Nelson Lichtenstein, "From Corporatism to Collective Bargaining: Organized Labor and the Eclipse of Social Democracy in the Postwar Era," in Steve Fraser & Gary Gerstle, eds., The Rise and Fall of the New Deal Order (Princeton, 1989), 122-145.

(30.) Peter Nolan & David Harvie, "Labour Markets: Diversity in Restructuring," in David Coates, ed., Economic and Industrial Performance in Europe (Aldershot, 1995); and, more generally, Joel Krieger, British Politics in the Global Age: Can Social Democracy Survive? (Cambridge, forthcoming), chapter 4.

(31.) All of the labor force and value added data in this paragraph come from either OECD, Labour Force Statistics (Paris: OECD, 1992, 1997), Table 7; or OECD, Services: Statistics on Value Added and Employment (Paris, OECD, 1997).

(32.) Soskice, "Divergent Production Regimes," 113-114. The data come originally from classifications made by Michael Porter, The Competitive Advantage of Nations (New York, 1990).

(33.)The relationship between service sector employment, total employment growth and the creation of insider and outsider groups and of differential career opportunities for women is explored provocatively in Gosta Esping-Andersen, "Politics without Class: Postindustrial Cleavages in Europe and America," in Kitschelt, et al., Continuity and Change in Contemporary Capitalism, 293-316; and in Esping-Andersen, The Three Worlds of Welfare Capitalism (Cambridge, 1990).

(34.)See, for example, the almost exclusive focus on these issues in Berger & Dore, National Diversity and Global Capitalism; and the recurrence of such themes in Peter Hall's useful review of the literature: Hall, "The Political Economy of Europe in an Era of Interdependence," in Kitschelt, et al., eds., Continuity and Change in Contemporary Capitalism, 135-163.

(35.) See Michael Roe, Strong Managers, Weak Owners: The Political Roots of American Corporate Finance (Princeton, 1994).

(36.) See Elizabeth Fones-Wolf, Selling Free Enterprise: The Business Assault on Labor and Liberalism, 1945-1960 (Urbana, 1994); Howell J. Harris, The Right to Manage: Industrial Relations Policies of American Business in the 1940s (Madison, 1982); Robert Collins, The Business Response to Keynes, 1929-1960 (Columbia, MO, 1981); Useem, The Inner Circle; and David Vogel, Kindred Strangers: The Uneasy Relationship between Politics and Business in America (Princeton, 1996)

(37.) Nick Tiratsoo & Jim Tomlinson, Industrial Efficiency and State Intervention: Labour, 1939-51 (London, 1993); Tomlinson, "The Failure of the Anglo-American Council on Productivity," Business History XXXIII, 1 (January, 1991): 82-92; Tomlinson, "A Missed Opportunity? Labour and the Productivity Problem, 1945-51," in Geoffrey Jones & Maurice Kirby, eds., Competitiveness and the State: Government and Business in Twentieth-Century Britain (Manchester, 1991), 40-59; Tiratsoo, "Standard Motors, 1945-55, and the Post-war Malaise of British Management," in Y. Cassis, F. Crouzet & T.R. Gourvish, eds., Management and Business in Britain and France (Oxford, 1995), 88-108; I.C. McGivering, D.G.J. Matthews, & W.H. Scott, Management in Britain: A General Characterisation (Liverpool, 1960), 91-101; and, more generally, Tomlinson, Government and the Enterprise since 1900: The Changing Problem of Efficiency (Oxford, 1994). On the theory of management, see John Child, British Management Thought: A Critical Analysis (Londo n, 1969); and, more generally, Mauro Guill[acute{e}]n, Models of Management: Work, Authority, and Organization in a Comparative Perspective (Chicago, 1994), esp. chapter 5.

(38.) See Child, British Management Thought; T. Lupton, Management and the Social Sciences (Harmondsworth, 1971); and Roy Lewis & Rosemary Stewart, The Managers: A New Examination of the English, German and American Executive (New York, 1961). The evolution of consultancy in Britain is particularly unique and interesting. See Christopher McKenna, "'Le Defi Am[acute{e}]ricain:' The Role of Consulting Firms in the Americanization of Europe, 1957-1975," Paper delivered to the International Conference of Europeanists, Baltimore, February, 1998; Derek Matthews, Malcolm Anderson & John R. Edwards, "The rise of the professional accountant in British management," Economic History Review L, 3 (1997): 407-429; Matthias Kipping, "The U.S. Influence on the Evolution of Management Consultancies in Britain, France and Germany since 1945," Business and Economic History XXV (1996): 112-123; Stanley Hyman, An Introduction to Management Consultancy (London, 1961); and Patricia Tisdall, Agents of Change: The Development and Pra ctice of Management Consultancy (London, 1982).

(39.) The major studies of these corporatist efforts are by Keith Middlemas, Power, Competition and the State, Vol I: Britain in Search of Balance, 1940-1961 (Stanford, 1986), and Vol. II: Threats to the Postwar Settlement, 1961-1974 (London, 1990). See also Stephen Blank, Government and industry in Britain (Farnborough, 1973); and Wyn Grant & David Marsh, The Confederation of British Industry (London, 1977); and Howard Gospel, Markets, Firms and the Management of Labour in Modern Britain (Cambridge, 1992).

(40.) Nigel Harris, Competition and the Corporate Society: British Conservatives, the State and Industry, 1945-1964 (London, 1972).

(41.) Jacques Leruez, Economic Planning and Politics in Britain (Oxford, 1975); Peter Hall, Governing the Economy: The Politics of State Intervention in Britain and France (New York, 1986); and Political and Economic Planning (PEP), Thrusters and Sleepers (London, 1965).

(42.) See Graham Turner, Business in Britain (London, 1969); and Benedict Nightingale, "America Invades British Industry," New Society (February 9, 1967).

(43.) On the latter, see Richard Cockett, Thinking the Unthinkable: Think-Tanks and the Economic Counter-Revolution, 1931-1983 (London, 1994).

(44.) See Andrew Gamble, The Free Economy and the Strong State: The Politics of Thatcherism (Durham, 1988); Christopher Johnson, The Economy under Mrs. Thatcher, 1979-1990 (London, 1991); and Russell Keat & Nicholas Abercrombie, eds., Enterprise Culture (London, 1991).

(45.) Donald MacDougall, Don and Mandarin: Memoirs of an Economist (London, 1987), 253-256; Charles Dellheim, The Disenchanted Isle: Mrs. Thatcher's Capitalist Revolution (New York, 1995), 198-199; Peter Jenkins, Mrs. Thatcher's Revolution: The Ending of the Socialist Era (Cambridge, MA, 1988), 153.

(46.) Leslie Hannah, The Rise of the Corprate Economy (London, 1976).

(47.) These data come from successive January/February 1999 issues of the Economist. ILO figures would be slightly higher for all countries.

(48.) A sense of the wide range of variables that would have to be discussed to get a truly comprehensive account of societal convergence, or its lack, can be gained from Colin Crouch, The Structure of Western European Societies (Oxford, 1999). Crouch gives particular emphasis to religion, the changing role of women and demography.

(49.) See Peter Hall, "Social Capital in Britain," British Journal of Political Science, XXIX 3 (July, 1999), 417-462. The literature on the United States is considerable and remains controversial. For the clearest statements, see Robert Putnam, "Bowling Alone: America's Declining Social Capital," Journal of Democracy VI (1995):65-78; and "Tuning In, Tuning Out: The Strange Disappearance of Social Capital in America," P.S.: Political Science and Politics XXVIII (1995): 664-683.

(50.) The intellectual history of anti-Americanism, particularly in Europe, will have to be written alongside the parallel histories of anti-communism and American efforts to organize opposition to the Soviet Union, and of the mass consumption of the products of American capitalism. For some beginnings, see Richard Kuisel, Seducing the French: The Dilemma of Americanization (Berkeley, 1993); Victoria DeGrazia, "Mass Culture and Sovereignty: The American Challenge to European Cinemas, 1920-1960," Journal of Modern History LXI (March, 1989): 53-87; and Peter Coleman, The Liberal Conspiracy: The Congress for Cultural Freedom and the Struggle for the Mind of Postwar Europe (New York, 1989) and Frances Saunders, Who Paid the Piper: The CIA and the Cold War (London, 1999).

(51.) See, for example, Wolfgang Streek, "German Capitalism. Does It Exist? Can It Survive?" in Crouch & Streek, Political Economy of Modern Capitalism, 33-54.

(52.) On the discursive ramifications, see Vivien Schmidt, "Discourse and (Dis)integration in Europe: The Case of France, Germany and Great Britain," Daedalus # 126 (Summer, 1997): 167-197.

(53.) Brian Barry, "Does Democracy Cause Inflation? Political Ideas of Some Economists," in L. Lindberg & C. Maier, eds., The Politics of Inflation and Economic Stagnation, (Washington, D.C., 1985), 317.