The European Union: A Dynamic Complex System of Clubs Comprised by Countries Performing a Variety of Capitalism

Abstract

The EU can be regarded as a club where integration is the main club good. For decades, club convergence applied; however, currently there is insufficient level of convergence. The club theory approach becomes increasingly significant with Brexit and the remaining EU-27 heading towards a multi-speed Europe. Overall, the economy of the EU constructs a complex system implying the existence of sub-systems: clubs within the club. Dynamism is an inherent feature of the system. There are outside effects as well as factors influencing the system from inside, many of the latter rooting in the various capitalism models of the member states. In this work we analyse how the varieties of capitalism is related to convergence and complexity in the EU. In this context, the EU is an entity interpreted as a dynamic complex system of clubs comprised by countries performing a variety of capitalism.

What Is “Authoritarian” About Authoritarian Capitalism? The Dual Erosion of the Private–Public Divide in State-Dominated Business Systems

“…The context of postsocialist economies in East Central Europe (ECE)—that is, Hungary, Poland, Slovakia, and the Czech Republic—constitutes an ideal setting to study the mechanisms by which an authoritarian government extends the political domain into the economic one in the interest of the ruling elite. For more than a decade after the fall of communism, these countries were among the most advanced in their transition toward a Western-style capitalism, even if they benefited relatively less from European integration than their western counterparts (Pelle et al, 2019). Yet, in the past decade, all ECE countries experienced a dramatic change in direction in their transition, away from the Western ideal of a liberal democratic market economy toward a more state-dominated and less democratic model (Greskovits, 2015; Sedelmeier, 2014).…”

The realities of EU industrial policies analysed through automotive value chain dynamics

“…The original economic type goals of European integration had been economic development, upward convergence, and the overall well-being of people. However, throughout the decades, and especially from the 1990s onwards, divergence and differentiation have complicated the previously rather smooth one-way path of European integration characterised by widening and deepening in parallel (Pelle 2017;Pelle et al 2021). The largest stress test for the EU economy until 2020 was the global financial and economic crisis (GFEC).…”

“…Overall, the EU seems to be path-dependent in the sense that crises tend to set back European integration achievements and tend to put intra-EU convergence on hold. Instead, the core-periphery divide appears to be deepening as crises are harming the better-performing core EU member states to tendentiously lesser extents than the peripheral members, especially the Southern Eurozone countries (Pelle et al 2021). Regarding the economic actors in these critical times, resilience has become a key feature of companies, as well as of countries.…”

The various European capitalism models: Convergence and growth in the 2014–2019 inter-crisis period

“…Therefore, less painful measures were needed to be implemented there, which improved their relative situation further. Consequently, the real convergence of the early years of the EMU turned into divergence and the core-periphery divide became deep and apparently persistent (Pelle et al 2021). The crisis itself was an asymmetric shock for the member states, and the EU and the Eurozone did not have common institutions and means to tackle the situation.…”