Research Program
Since its foundation in 1985, the Max Planck Institute for the Study of Societies has gone through four program periods, each concerned with the governance of contemporary societies. Shifts in the program have reflected real-world changes in economic and political organization that generated new research questions, as well as the arrival of new directors with new research interests.
The first program period, from 1986 to 1995, featured historically and internationally comparative studies of the interaction between political-administrative intervention and societal self-organization in selected sectors “close to the state” (staatsnahe Sektoren). Special attention was paid to health care systems, organized research and science, and large technical infrastructures, in particular telecommunications. The objective was to develop a realistic and practically useful, social science–based theory of the governance of modern societies by an interventionist state acting in cooperation with an organized society.
The second period, from 1996 to 2005, responded to the growing importance of markets and competition even in sectors that had previously been protected and controlled by state authority. Telecommunications, for instance, which until the mid-1990s had been a state monopoly, was privatized and deregulated. The expanding role of markets during the 1990s partly reflected shifts in ideology and in public perceptions of economic reality. But it was also driven by new constraints on the regulatory capacities of the nation-state arising from internationalization, including European integration, and from intensified international regime competition. Research at the MPIfG subsequently focused on emerging forms of multi-level governance and on the consequences of economic liberalization for states and governments.
The third period, from 2006 to 2016, examined the shift from state regulation toward market-driven forms of social order, paying particular attention to the social, cultural, and political preconditions for the functioning of markets and the re-forming of economic institutions in the wake of the liberalization of markets. Projects explored how markets and business organizations are embedded in historical, institutional, political, and cultural frameworks, as well as the social and political processes that shape economic relations over time. The aim was to develop an empirically grounded understanding of the social and political foundations – or the “constitution” – of modern economies and of the interrelations between social, political, and economic action. Particular attention was devoted to the process of liberalization affecting various spheres of advanced societies and to the resulting “disembedding” of the capitalist economy from the tutelage of politics and the state.
The fourth period, from 2017 to the present, which coincided with the tenure of the Institute’s current directors, continued to place capitalism as a historically specific sociopolitical order at the center of the research agenda. Research focused on the growing instability of contemporary capitalism, manifested in its increasing difficulty to generate the material and ideational resources necessary for its own reproduction, and on the multiple challenges that such instability poses for society and democratic politics. Projects have examined the trajectories of different types of growth models and their specific sources of sociopolitical instability, the role of expectations about the future, including their social construction and political effects, new political conflicts arising from climate change, and the influence and reproduction of extremely wealthy families in contemporary capitalism.
We currently observe a renewed transformation of modern capitalism that once more requires a reorientation of our analytical focus. For roughly four decades, advanced capitalist societies shared a broadly liberalizing trajectory. Trade barriers were lowered; production was reorganized along global supply chains; finance was liberalized; central banks were insulated from electoral politics; and industrial policy and direct state intervention were largely restrained. Markets expanded into new domains, while states redefined their role as guarantors of competition and macroeconomic stability rather than as direct architects of economic transformation.
That familiar landscape – which inspired many of the Institute’s research projects on liberalization and markets – has now fractured. Contemporary capitalism is entering a turbulent new phase where important parameters are shifting once again, in parts as the result of the turns in the previous period of social and economic transformation. Rising inequality and economic stagnation for large parts of the population have eroded the distributive foundations of political stability, leading to anti-immigration sentiments and electoral demands for a restrengthening of the nation-state and, in some cases, more authoritarian forms of governance. The mounting importance of private assets combined with growing wealth inequality leads to sharpened inequalities in the distribution of life chances and the increasing political weight of a class of super-wealthy individuals and a handful of globally dominating tech companies that operate in oligopolistic market structures. Spatial disparities between dynamic urban centers and structurally weak as well as infrastructurally disadvantaged regions and education-related divisions produce unequal labor market opportunities, lifestyles, and political preferences. Socioeconomic conflicts more often take the form of value conflicts, frequently running along the divide between the centers of the knowledge economy and those social groups that do not benefit from their dynamism and who feel marginalized by the values and cultures that have emerged in these centers. At the same time, global warming worsens conditions for social life, while attempts to decarbonize economies encounter significant opposition. These changes are amplified by a fragmented public sphere and further reinforced by demographic ageing, which also puts new strains on welfare states, fiscal regimes, and innovative capacity, bringing questions of the social foundations of democratic politics to the center. These developments take place against the backdrop of the weakening of intermediary institutions like trade unions, churches, political parties, and the quality media that for a long time played an important role in arbitrating socioeconomic conflicts and were an effective shield against populism.
Many countries in the Global South confront related pressures – ecological deterioration, technological transformation, and widening socioeconomic inequality – while growth slows and earlier patterns of rapid expansion give way to more uncertain trajectories. The tensions of transition are thus not confined to advanced economies but unfold across the global political economy. In many ways the two are interrelated: Changing economic and political power balances between what has been called the Global North and the Global South are fueling many of the rising geopolitical tensions. China, which has risen to a global power, has the most successful economy during the past decades, and represents an economic model with very strong state influence over economic affairs.
These changes would be ill understood if perceived as temporary shocks after which the liberal regime would regain its dominance. Rather, we are observing another essential transformation of the organization of capitalism with the development of new relations between economy, state, and society. This change unfolds across multiple temporal scales. Some pressures, like financial crises, geopolitical confrontations, and technological breakthroughs, emerge abruptly. Others, like climate change, demographic ageing, and long-term wealth concentration, operate gradually but persistently. Together, they destabilize inherited institutional arrangements. We observe an acceleration of processes of social and economic change that societies find increasingly difficult to cope with.
Perhaps the most striking change to be currently observed is the once again shifting role of the state. With the resurgence of industrial policy, reorganization of value chains, and the redirection of resources toward military rearmament and energy transition, new forms of intervention in the economy are emerging that differ markedly from those of the preceding phase of liberalization. The boundaries between market coordination and political direction look very different today compared to a few years ago.
The pressures driving this transformation stem from the limitations of liberalized markets in confronting central economic and social challenges and a profound transformation in the approach to geostrategic rivalry. Ecological constraints require the rapid decarbonization of energy systems with the need for huge infrastructure investments that are not sufficiently produced by market incentives. The need to close highly profitable fossil business models to reduce greenhouse gas emissions provokes backlashes from companies and citizens that need to be mediated by states. Increased geopolitical tensions arising from changing international power balances lead to the expansion of military spending, making the weapons industry, which always stands in close interaction with the state, a central economic player. Digital technologies reorganize markets, reshape labor relations, financial markets, and concentrate economic and political power in unprecedented ways. To some extent, the state takes a regulatory role for these technologies but also uses them as tools in conflicts over geopolitical dominance. This can be observed, for instance, in policies regarding financial infrastructures but also in the close political monitoring of exports of advanced digital technologies. The enlarged geopolitical rivalry triggers the weaponization of global economic exchange, leading to the restructuring of global supply chains, and challenges the core assumption of liberal economic policies that presumes that frictionless interdependence dominates because it would be to the benefit of all.
The renewed prominence of the state in contemporary capitalism marks, in part, a return to the Institute’s earlier research programs, which examined the steering capacities of public authority and their limits in complex societies. Questions on the relationship between the state and the economy reemerge today, but do so in a fundamentally changed social context. Despite the articulation of new demands on the state and its transgression of boundaries previously set by liberalization, the extent to which states can actually “steer” socioeconomic developments is highly restricted. Heightened social complexity and the scarce fiscal means available constrain states’ capacities for investments and for compensating those who lose economically and socially in the transformation process. Economic interdependence – but also the power of technology-controlling firms – put additional limits on the regulatory capacities of states. The political dissatisfaction emerging from this leaves the state often appearing overburdened with the task of repair work, leading to voter opposition and legitimation problems of the political system. At the same time, intensifying geoeconomic struggles over control of value chains in the global political economy (for example in digital technologies) act as a new source of normative alignment behind the national economy and state visions of its sovereign future.
In future years, the Institute will analyze these profound processes of transformation and shifting state-economy-society relations by further strengthening the integration of economic sociology and political economy. The structural transformations now underway require a perspective that reexamines the interrelations of the economy with legal regulation, political authority, social norms, culture, and shared expectations. This broader perspective emerges from a further integration of the two research strands.
Economic sociology has examined how markets are socially embedded, how firms and organizations act under conditions of uncertainty, and how new sectors and organizational fields emerge. While these questions remain central, future research will need to reconsider the embeddedness of economic action in light of profound social, (geo)political, technological, and ecological change. The Institute will also deepen its understanding of how economic transformations drive social change, for instance by investigating how growing wealth concentration and the increasing importance of asset ownership change the distribution of life chances. Questions on the social consequences of labor market shifts triggered by the impact of artificial intelligence and on the reorganization of social relations and the public sphere – partly also caused by digital technologies – can be naturally added to the research portfolio.
Political economy analyzes how institutions, political action, and distributional conflict shape policy regimes and macroeconomic trajectories. It shows how growth models are constructed, how political coalitions sustain them, and how crises destabilize them. It also investigates the workings of multilevel governance, with – at the MPIfG – a specific focus on European integration. Political economy helps uncover historical trajectories, for instance by showing why liberalization took the form it did and why it is now being reconsidered. One challenge in future years will be for political economists to study the potential fracturing of growth models, their remaking, or the effects of persistent non-growth, while reexamining the political and institutional foundations of capitalism in light of deep and rapid change. Another focus will be on how states reorient their actions in light of technological transformations – for example, through industrial policy, infrastructure investment, or local procurement – how related strategies across the globe vary by economies’ relative position in value chains, and how technology races materialize as lived socioeconomic experiences in societies.
In the task of studying shifting state-economy-society relations, economic sociology and political economy complement each other. Political economy risks overemphasizing macro-level dynamics while overlooking transformations in everyday social practices; economic sociology risks fragmentation at the micro level. Together, however, they allow us to conceptualize capitalism as a historically specific, socially embedded, and politically contested social formation in constant flux. To investigate this dynamic reconfiguration, historical perspectives are of special importance.
Understanding and explaining how profound transformations of capitalism unfold and what consequences they have for politics and society will constitute the central task of the Institute’s research in the coming years. Of special importance in this will be revisiting the scope and limits of the state in the structuring of economy and society. This will lead to a new set of empirical research projects and theoretical conceptualizations; at the same time, this new program continues the research path through which the MPIfG has achieved its impact as an internationally leading research institute in the social sciences over the last four decades.