TINA and the Market Turn: Why Deindustrialization Proceeded under Democratic Capitalism but Not State Socialism

Abstract

Deindustrialization was one of the most disruptive social transformations of the twentieth century. Why did democratic capitalist regimes permit and survive this process, while state socialist regimes did not? Drawing on historical evidence from the United Kingdom, Poland, and the United States, this article advances two mechanisms as explanation: first, enabled by the polity-economy distinction characteristic of capitalism, the belief that “there is no alternative” (TINA) could appear credible in the West but not the East. Second, the Western turn toward market-led deindustrialization reduced the economic costs of deindustrialization and, more important, deprived unrest in the West of focal points for protest, lowering political costs too. Strengthening the case for these two mechanisms, I rule out four alternative explanations: generic inefficiency in planned economies, differential elite views on the necessity of structural change, immediate acquiescence by Western electorates or unions, and a uniquely successful return to high growth rates in the West.