Steven K. Vogel is Director of the Political Economy Program, New Il Han Professor of Asian Studies, and Professor of Political Science and Political Economy at the University of California, Berkeley. He specializes in the political economy of advanced industrialized countries, particularly Japan. He is the author of Marketcraft: How governments make markets work (2018), Japan Reshaped: How Government and Industry Are Reforming Japanese Capitalism (2006), and Freer Markets, More Rules: Regulatory Reform in Advanced Industrialized Countries (1996) and co-editor of The political economy reader: contradictory perspectives and contemporary debates (2002).
Where do you see the most exciting research/debates happening in your field?
I am most inspired by truly interdisciplinary approaches to political economy. This means moving beyond a political analysis of economic policy, or an economic model of politics, to fully integrate multiple disciplines into an integrated analysis. The biggest challenges of our time – climate change, global public health, financial crises or inequality – all require a holistic political economy perspective. And real-world developments have prompted a rethinking of the field of scholarship. For example, the rise of dominant technology platforms such as Google or Amazon has reinvigorated theoretical arguments about the relationship between market power and political power as well as more specific debates about antitrust policy. And the supply chain vulnerabilities exposed by the pandemic have inspired a reassessment of theories about the role of the state in the economy as well as practical debates about industrial policy.
How has the way you understand the world changed over time, and what (or who) has caused the most significant changes in your thinking?
During my graduate studies, I was exposed to the idea that markets are not neutral or natural, but rather human fabrications, drawing on the scholarship of Karl Polanyi. Kenneth Jowitt presented this view convincingly in theory at a graduate seminar, and John Zysman taught me how to apply it to specific countries and policy issues as director of thesis. I then explored this fundamental idea further by working on a thesis on the deregulation movement in advanced industrial countries. I discovered that deregulation does not occur in the literal sense of a reduction in regulation. Instead, governments needed more regulation to stimulate competition. I tried to summarize this idea in the title of my first book: Freer markets, more rules.
What is “marketcraft”?
Marketcraft refers to market governance, including all the arcane rules that make markets work, from corporate law, to financial regulation, to labor market regulation, to antitrust policy, to sectoral regulation (such as the regulation of telecommunications or electricity) and the protection of intellectual property. In the book MarketcraftI recognize it as an essential governmental function comparable to the art of government. This does not mean that governments always get things right. Just as the art of government in the real world can go very well or very badly, so can the art of the market.
How can the art of the market be used to strengthen economic and military security?
Marketcraft is essential to the ecosystem that promotes or hinders productivity and innovation. For example, financial regulation may be designed to efficiently allocate capital to productive uses or it may be structured to increase rents (unjustified returns) for financial institutions and their managers. Labor regulations may be designed to promote coordination between workers and management to improve productivity, or to make it easier for firms to increase profits at the expense of their workers.
In the digital age, I would argue we need stronger antitrust enforcement and weaker intellectual property protections. Large, dominant technology platform companies such as Google and Amazon increasingly threaten innovation through their market dominance, control of market infrastructure, and anti-competitive practices. The government should therefore limit its power in order to preserve the bottom-up innovation system that drives the digital economy. At the same time, the costs of IP protection have increased while the benefits have declined, as IP protection hinders the dissemination of knowledge and collaborative production models enabled by digital technology. The U.S. government should therefore moderate some intellectual property protection – by raising the threshold for coverage, narrowing its scope, reducing its duration, and expanding fair use provisions – in order to foster more innovation.
You have previously note THE similarities between the art of governing and the art of the market. What role does foreign policy play in your theory?
I would say that marketcraft is more of a conceptual framework than a theory. It allows you to understand how markets are governed, from formal laws and regulations to business practices and norms to social norms and beliefs. The book applies this framework at the national level, comparing the United States to Japan, but it can also be easily applied at a subnational or sectoral level. National market systems are elements of foreign policy, as noted in the answer to the previous question, but they are also powerfully shaped by developments at the international and global level, including the foreign policies of other countries. For example, regulation of the U.S. market is constrained by international agreements, responds to international economic pressures, and is influenced by the diffusion of international standards.
It was recently renewed calls for the creation of an Asian NATO. Is this the natural step for Japanese security?
No. The Asian region differs fundamentally from the European region. The Asian security system is based on a model of bilateral hub-and-spoke alliances with the United States and its Asian allies, such as the US-Japan, US-Korea, and ANZUS alliances. The Asian region experiences less formal integration than the European Union, but it experiences substantial informal integration in the form of trade, investment, and regional supply chains.
Rather than attempting to forge a bloc to counter China, Japan and its allies should attempt to integrate China into the regional and global order. It won’t be easy, but it should nevertheless be the long-term goal. This means negotiating agreements on trade and investment issues, cooperating on global challenges (such as climate change), and gradually building a regional security architecture, starting with information sharing and security-enhancing measures. trust, then progressing towards more formal cooperation.
In a recent article, you asked why the Biden-Harris administration isn’t known for its strong economy. Why is this the case and what steps could they take to counteract this?
This remains a bit of a mystery to me. The Biden-Harris record is much stronger than that of the Trump administration, and yet many Americans still think Trump would do a better job on the economy. Numerous surveys show that many Americans misinterpret economic conditions. For example, a Harris poll for Tutor this May showed that Americans believed the economy was in recession even though it was not; they thought the stock market was down even though it was up; and they believed that unemployment was at a high level even though it was at a low level.
But to answer your question, I would offer three propositions: 1) People really don’t like inflation, and the popular perception that prices are still too high trumps other considerations like inflation growth. employment and wages. 2) Americans tend to think that Republicans are better than Democrats at managing the economy – even though long-term evidence suggests otherwise. 3) The media has perpetuated some of these misperceptions and has not done enough to dislodge them.
So what can the Harris campaign do about it? Clearly, they are trying to reduce Trump’s perceived advantage over the economy, and they are having some success. But perhaps they should be less defensive and more aggressive, and argue forcefully that Biden-Harris’ record is significantly better than Trump’s.
What have you learned from your experience in journalism, particularly in Japan, and how could it be applied to academic work?
My experience as a journalist has provided me with relevant skills as an academic, including the ability to write clearly, meet deadlines, conduct interviews, and gather information more generally. I learned a lot about Japanese politics and political economy through my journalism, especially through more in-depth reporting. For example, I followed a member of the Japanese Diet to a rural district for three days during an election campaign, and the experience profoundly informed my understanding of Japanese politics and the way I taught it to my students. I have also reported on the anti-nuclear movement, women in politics, the agricultural lobby, foreign policy and financial reforms.
What is the most important advice you could give to young researchers in international relations?
Take part in the most pressing issues of our time. We live in a time of multiple crises and so I don’t think we have the luxury of pretending that we are disengaged academics. We need to make our research as rigorous and objective as possible, but then apply our findings to policy recommendations for the real world.
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