A challenge to the new economic sociology is that central economic processes should become the focus of theoretical and empirical sociological analysis. This chapter argues that competition processes are co-instituted with markets, and that market processes are in turn co-instituted with industrial divisions of labour. It begins with an examination of some of the few empirically based studies of competition, suggesting that they often are developed for overtly normative or prescriptive purposes. The chapter then returns to analyse some of the early Weberian conceptions of competition, upon which to build an economic sociology of competitive processes. It provides an exemplification of the analytical framework through a schematic analysis of changing forms of competition in the historical development of UK food supermarkets. The conclusion drawn from this analysis is that competitive processes are a result of processes of transformation wider than intra-market dynamics.
Post-crisis Asia – economic recovery, September 11, 2001 and the challenges ahead
Shalendra D. Sharma
In the aftermath of East Asia's spectacular economic collapse in mid-1997, even the most optimistic predictions gave at least a decade before Asia could fully recover. Although it was expected that the growing intra-Asian trade and demand from the European Union would help to fill the void, there was little doubt that Japan's recovery was crucial to the region's recovery. Most Asian countries experienced a sharp economic slowdown beginning in the last quarter of 2000. The problems of a deteriorating external environment due in large part to the downturn in the US economy were exacerbated by the September 11 terrorist attacks. The single greatest push for East Asian regionalism had been the Asian financial crisis. It was clear that the Asian governments agreed that they must reduce their dependence on the G-7 countries and multilateral financial institutions like the International Monetary Fund (IMF) and the World Bank.
This conclusion presents some closing thoughts on concepts discussed in preceding chapters of this book. The book resides within a now-flourishing broader stream of ideas at the interface between economics and sociology. It contributes more to a sophisticated understanding of particular markets than they do to the theory of the general market system. Market activity implies that buyers and sellers are 'brought together' across time and space and that transactions are consummated and recorded. During the 1990s, sociological investigation of markets has tended to abandon earlier concerns with the social effects of the operation of markets and to concentrate instead on the social processes by which markets are made. As with the new economic sociology, evolutionary economists are wedded to a more sophisticated notion of individual behaviour than that embedded in the idea of Olympian rationality.
When the financial crisis unexpectedly hit the high-performing East and Southeast Asian economies in mid-1997, it was widely believed that the People's Republic of China (PRC) would be the next domino to fall. This chapter argues that China's handling of the crisis, and in particular, the country's ability to withstand the crisis, must be understood within the context of its domestic political economy. An important lesson of Mexico's peso crisis of 1994 and the Asian financial crisis was that a sound banking sector is the single most essential element of a healthy financial system. The State Administration for Foreign Exchange (SAFE) approval requirements and the related limitations on foreign participation in PRC equity markets had translated into low levels of portfolio investment. The Chinese authorities significantly intensified the enforcement of exchange and capital controls and moved to reduce circumvention.
This chapter studies the evolution of the software industry in the UK. It describes the role of demand factors in the process of vertical disintegration and distinguishes between the product and service segments of the software market. The chapter reviews the changing need for software in the growth of the global software industry. It highlights the role of a narrow demand base in the emergence of a market for traded software in the UK. The chapter examines the supply side of the software market. It also examines the impact of the demand- and supply-side factors on the nature of competition, competitive advantage and barriers to growth for firms in the UK software sector. The absence of a large commodity software market has meant a less radical impact of the software industry upon industrial growth in the UK economy.
This chapter argues that a more nuanced understanding of Indonesia's economic crisis can be gained by differentiating between the sources of 'vulnerability' and the 'precipitating' factors. The roots of the crisis can be traced back to the mid-1980s, when Indonesia embarked on an ambitious economic reform program. On January 27, 1998, with their backs against the wall, both the International Monetary Fund (IMF) and the Indonesian government took steps to deal with the banking sector problems. In the ensuing weeks, as the embattled Suharto vacillated and stalled, the economic downturn deepened and the Indonesian economy was brought to the brink of total collapse. Liquidity support to the banking sector continued to increase in large part to meet the continuing deposit withdrawals. Moreover, as part of Indonesia's commitments to the IMF, the government took steps to review and strengthen the prudential and regulatory framework of the banking system.
This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book presents the case studies of the individual countries: Thailand, Indonesia, South Korea and the People's Republic of China (PRC). It examines the factors behind the financial crisis and highlights the underlying similarities and the fundamental differences between the individual cases. The book provides a review of the competing perspectives on the new international financial architecture. It explains a number of fundamental issues and its implications for the emerging market economies. The book also presents a more nuanced picture of the International Monetary Fund's (IMF) policies and its socioeconomic impact. It assesses the IMF's efforts to reduce moral hazard. The book also examines the reasons behind Asia's remarkable economic recovery and the challenges that lie ahead.
This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book provides a critical evaluation of the idea of the market as the definitive form of co-ordination and of the socially embedded nature of market processes. It explores the idea of competition as an instituted economic process. The book focuses on an empirical study of cultural industries in East London. It also explores the instituted arrangements constituting the 'peculiar economics' of professional sports. The book presents an analysis of the emergence of one particular market in the UK, that for computer software. It examines some of the conditions which resulted in the UK coming to specialise in services to client companies rather than the production of software packages for an arm's length market. The book also provides an account of regional economic adaptation to changed market circumstances.
This chapter argues that Korea's financial crisis had both long-term and short-term causes. Weaknesses in both the financial and corporate sectors, especially inefficient management and imprudent lending among financial institutions, coupled with over investment and low profitability in the corporate sector, made them vulnerable to external turbulence. The Korean crisis also illustrated the fact that, although the alliance between the government, the chaebols and the banks had been in place since the 1960s, it was no longer compatible with Korea's integration into the global financial market. The Korean form of democratization most closely followed what Samuel Huntington had called 'transplacement', where the sitting government would make a concession and the opposition groups would accept the compromise in order to avoid the political gridlock or civil disorder. The president-elect cooperated with the outgoing government and the ruling party to get legislative backing for several important reform measures.
There has been increasing interest and debate in recent years on the instituted nature of economic processes in general and the related ideas of the market and the competitive process in particular. This debate lies at the interface between two largely independent disciplines, economics and sociology, and reflects an attempt to bring the two fields of discourse more closely together. This book explores this interface in a number of ways, looking at the competitive process and market relations from a number of different perspectives. It considers the social role of economic institutions in society and examines the various meanings embedded in the word 'markets', as well as developing arguments on the nature of competition as an instituted economic process. The close of the twentieth century saw a virtual canonisation of markets as the best, indeed the only really effective, way to govern an economic system. The market organisation being canonised was simple and pure, along the lines of the standard textbook model in economics. The book discusses the concepts of polysemy , idealism, cognition, materiality and cultural economy. Michael Best provides an account of regional economic adaptation to changed market circumstances. This is the story of the dynamics of capitalism focused on the resurgence of the Route 128 region around Boston following its decline in the mid-1980s in the face of competition from Silicon Valley. The book also addresses the question of how this resurgence was achieved.