During the half-decade since Doing Capitalism first went to press, the Three-Player Game has continued to evolve, indeterminate and problematic as ever. This is the term I use to characterize the complex, reciprocal interactions between the state, financial capitalism, and the market economy. Out of this dynamic, successive technological revolutions have transformed the conditions of life over more than 200 years.
In the context of today's disruptions, it is essential to recognize that the Three-Player Game can have very different outcomes, as I wrote in the Introduction to the first edition:
From this dynamic and unstable configuration of political, economic, and financial forces... has emerged a world in which state investment in fundamental research induces financial speculation to fund construction of transformational technological infrastructure, whose exploitation, in turn, raises living standards for everyone dependent on the productivity of the market economy. But the three-player game is also responsible for a world in which bubbles and crashes in the financial system spill over and liquidate both the employed and their employers, generating appeals to the political process for redress and relief. In yet another version, we find ourselves in a world where "malefactors of great wealth"--to invoke Theodore Roosevelt's epithet--are able to exploit the political process in order to preserve and protect their exploitation of the market economy. So two overlapping sets of institutions--markets and the political process-compete in the allocation of resources and the distribution of the income and wealth generated by their application. Those who win in one arena have the opportunity to assert their power in the other; contrariwise, the losers in one can seek redress through participation in the other. Of course, the potential that the losers in the market would use the political process to redistribute the market's outcomes motivated resistance to extension of the franchise for generations--centuries. But history records that the economically and financially powerful have had at least as much success in bending the political process to their advantage.
The structural fragility of the Three-Player Game was demonstrated during the 1930s. That fragility is again evident in the haphazard response to the second great globalization. And here lies a second irony. Globalization, both in the late nineteenth century and over the past generation, has...