Two systems of governance, capitalism and democracy, prevail in the world today. Operating simultaneously in partially distinct domains, these systems rely on indirect governance through regulated competition to coordinate actors; inevitably, these systems influence and transform each other. This book rejects the simple equation of capitalism with markets in favor of a three-level system, a model which recognizes that markets are administered by regulators through institutions and governed by a political authority with the power to regulate behavior, punish transgressors, and redesign institutions. This system's emergence required the sovereign to relinquish some power in order to release the energies of economic actors. Rather than spreading through an unguided natural process like trade, capitalism emerged where competitive pressures forced political authorities to take risks in order to achieve increased revenues by permitting markets for land, labor, and capital.

his monograph on the concept of capitalism is the intellectual core of a larger work, entitled Capitalism, Its Origins and Evolution as Ta System of Governance, due for publication November 2009. The purpose of this monograph is to put forth an original concept of ca- talism as a system of governance, including a theory of how it functions at any point in time and how it evolves through time. In the larger book, I present a theory of its origins and evolution and support this theory with a set of country case studies that span both time and geography. It was, in fact, my experience in studying these case studies that led me to the c- cept presented here as well as to the theory of capitalism's origins and e- lution. In the larger book, I build on the present work, identifying and expla- ing capitalism as a system of governance for political entities such as - tion states. I then supplement these ideas with a description and expla- tion of three generic economic strategies. Taken together, my studies of economic strategies and specific capitalist systems of governance are - tended to enhance and enrich existing literature on "varieties of capit- ism."