Steven Vogel is Chair of the Political Economy Program, the Il Han New Professor of Asian Studies, and a Professor of Political Science at the University of California, Berkeley. He specializes in the political economy of advanced industrialized nations, especially Japan. 

Ally Mintzer: I’d like to first talk about your personal journey and how it has led to your research on political economy. Can you describe your background and what experiences led you to discover your passion for market governance and Japanese politics?

Professor Vogel: I was taken to Japan at age 13 against my will by my parents. I was going to study at an American high school to pretend I wasn’t in Japan, but the school would have forced me to study Japanese. So I figured if I had to study Japanese, I might as well go all the way and attend a Japanese high school. When I came back to the US a year later, I had reverse culture shock, and eventually returned to Japan to finish high school. I majored in international affairs at Princeton University and spent the summer between my junior and senior year interning for a member of the Japanese Diet, which is their parliament. This is what got me interested in Japanese politics. I hit the jackpot because this legislator was then appointed as Defense Minister. After I graduated, I went back to Japan as a reporter for the Japan Times, and then moved to France as a freelance reporter, editor, and research assistant.

Ally Mintzer: What prompted the transition from being a reporter to getting a PhD?

Professor Vogel: When I left college, I had a feeling I would be going back to graduate school eventually in California, but I did not know what discipline. My father is an academic, so that probably influenced me. I loved being a reporter, but my one frustration was that whenever I became interested in a new topic, I had to move on. Now as an academic, I have the exact opposite problem: once I launch a major research project, I’m stuck with it for the long haul. I find that my personality falls somewhere in between the two. I like the excitement of new topics, but reporting was too surface-level. I was three years out in the field when I came back to graduate school, but I figured if I wanted to do a PhD, I had better do it then. I did miss reporting because it is an exciting job for someone in their 20’s, just absorbing information constantly. 

Ally Mintzer: I feel like I’m in a similar position. I would love to attend graduate school some day, but I do not know which discipline yet.

Professor Vogel: It’s great to first get a job right out of college, and I generally don’t encourage my students to go to graduate school right away. Obviously, the more interesting the job the better—something where you’re just absorbing information like reporting or consulting. Those are great first jobs that teach you what you like and don’t like. It’s hard to figure that out in college because you’re developing skills like taking tests—that you may never do again. Once you’re in the professional world, you’ll realize, hey, I’m great at presentations and terrible at memos, for example. Within a year or two you can really get a direction; at least that’s what I find with my former students.   

Ally Mintzer: So how did you decide to get your PhD in political science?

Professor Vogel: My interests spanned from politics to economics to philosophy. The way I decided my discipline, which wasn’t the most logical, was that I figured if I did a PhD in economics or philosophy and did not like it, I would be stuck. But with political science, I could hedge my bets and do some philosophy and economics too. Even at the time I didn’t think it was a rational decision, but what surprises me looking back is that I actually knew my interests very well.  

Ally Mintzer: When did you realize you wanted to teach political economy and Japanese politics?

Professor Vogel: When I was doing my PhD, I did not think of myself as a Japan specialist. I started in international relations and ended in comparative political economy, although I didn’t realize it at the time. My dissertation was on the deregulation movement that started in the 1970’s in the US and spread throughout the world, focusing mainly on Britain and Japan. I figured Japan would be easy since I had the language skills. I focused on telecommunications and finance initially, then extended my dissertation to include broadcasting, utilities, and transport, also in France, Germany, and the US. By that point, I was knee-deep in political economy. I applied for comparative and Japanese politics jobs, and was hired to teach Japanese politics at UC Irvine. Ironically, I had never actually taken a class in Japanese politics, but I was well-equipped to teach since I went to high school there, worked in politics myself, and was a reporter there. I have been teaching comparative political economy and Japanese politics ever since! 

Ally Mintzer: What are some areas you are researching right now?

Professor Vogel: I’m kind of at a crossroads. After I finished my Marketcraft book, I did pieces on Japanese labor, Japanese corporate governance, the regulatory roots of inequality, and entrepreneurship in the United States. I’ve been writing a lot of op-eds because I’m worried about the state of our country, and I try to give commentary on policy. I think my next project will be on economic inequality, very broadly defined, across industrial countries. I still haven’t determined which countries or how theoretical or empirical it will be. The demands for data will probably not be as high as my first book on deregulation and my second book Japan Remodeled, which involved more extensive original research.

Ally Mintzer: You mentioned your recent book Marketcraft, How Governments Make Markets Work. Can you explain what you mean by “marketcraft?”

Professor Vogel: “Marketcraft” is my word for market governance, which is how markets are structured by governments, firms, and individuals, including laws, regulations, business practices, and social norms. Markets are inherently governed; they don’t work without rules. It sounds pretty simple, but it’s amazing how much both intellectuals and policymakers just ignore that and say that we need less government and more markets—as if those two came together. I used the term marketcraft because I was trying to evoke statecraft, which is similarly critical for the welfare of a nation. For instance, what was the greatest economic success story and the greatest economic failure in the United States over the past four decades? For failure, it would be the global financial crisis or Covid-19, and the success would be the digital revolution. Both the financial crisis and the digital revolution were products of marketcraft, which gives you a sense of the scale of the consequences of marketcraft. Amazing things can happen if you get marketcraft right, and terrible things can happen if you get it wrong.

Ally Mintzer: You’re also co-chair of the UC Berkeley Network for a New Political Economy to develop a new intellectual paradigm as an alternative to neoliberalism. Neoliberal is a word that is so ubiquitous yet many describe it differently. So first, how would you define neoliberalism, and what would a post-neoliberal society look like?

Professor Vogel: I was hoping for easy questions! I have avoided the term neoliberal until recently and instead used “market liberal” for precisely that reason. There’s so much literature on it; it’s like a code word with multiple meanings. I believe there are five or six different main definitions of neoliberalism, but two prominent ones include an intellectual movement beginning in the 1930’s and 1940’s with Friedrich Hayek and Milton Friedman and a political project beginning with Margaret Thatcher and Ronald Reagan. In a nutshell, I would say that neoliberals believe that it is desirable to have less government and more markets. This ideology has caused incredible damage for analysis, for policy, and for public welfare. 

An intellectual replacement for neoliberalism would be market institutionalism. I’m not pretending I came up with this; there are entire subfields in economic sociology, economic geography, or institutional economics that treat markets as institutions, not natural institution-free spaces. In terms of policy, market institutionalism suggests a “predistribution” agenda.  Do we let markets do their thing and then have a redistributive tax or welfare policy, or do we design markets to achieve better outcomes from the get-go? A real market liberal like Hayek or Friedman would go bonkers, saying we should not mess with the free market! I would counter that there is no such thing as a free market, as markets are inherently governed. If you believe in equity or sustainability, those goals should not be outside the realm of market design. This idea totally transforms the progressive agenda as you’re not only addressing social regulation, tax policy, and welfare spending but how to redesign markets for a more equitable and sustainable market economy as well. To be concrete, this would include changing labor regulations to balance the power between employers and employees. It would also mean reimagining corporate governance so corporations maximized the welfare of a broader range of stakeholders rather than a narrow range of shareholders and stock options-maximizing executives.

Ally Mintzer: You teach a course at UC Berkeley on market governance and the digital economy. It was recently announced that the DOJ is filing an antitrust lawsuit against Google. What are your thoughts on this and the future of possible Big Tech break-ups?

Professor Vogel: I have a lot of thoughts about antitrust. I’m not sure I’m ready to dive into the weeds of Google’s exact practices, but it is clear that we need more aggressive antitrust enforcement. If you look at the US economy over the past few decades, there has been a gradual increase in market concentration which has led to weaker macroeconomic performance. I also believe aggressive antitrust policy would be good politically, which is controversial because most antitrust experts in economics say you shouldn’t consider market power as a political problem. Yet a high concentration of market power correlates with a high concentration of political power, which is not good for our political system. 

There is a valid question about what to do with Big Tech. These companies became so big because they offered innovative services, lots of people like them, and their network effects are not inherently bad. But if they are leveraging their market power into anti-competitive practices, that’s a problem. The US should become much tougher on merger approvals; next time Facebook wants to buy Instagram, agencies should think twice. The authorities need to consider not only how big these companies are at the time, but their potential to become a competitor—whether the acquisition is an attempt to prevent competition. One should be cautious with breakups, however; would the harm of breaking them up outweigh the benefits? I don’t have a great answer, but I lean towards some action because there is pretty good evidence of anti-competitive practices by Big Tech firms. This might be slightly radical, but it’s probably a good principle that you can run a marketplace or participate in a marketplace, but you can’t do both. 

Ally Mintzer: How is it teaching here at UC Berkeley where you got your PhD?

Professor Vogel: Oh, I love Berkeley! We do not hire our own PhD’s, so I had to do six years of hard exile before they let me come back. It was great to come back because I knew the department, a lot of my own professors were still around, and the department was an intellectual match.

My first fall of my PhD, wanting to come to California, I was actually deciding between here and Stanford. Again, not necessarily rationally, I chose Berkeley partly because it had a bigger department and I figured someone could help me determine my interests. Berkeley seemed very foreign at first, being from the East Coast. To make matters worse, one of my high school friends from Japan was starting his MBA at Stanford. I used to get calls from him on a daily basis saying, “I don’t know whether to go to the Dean’s social, you know, or this champagne lunch with the President.” That did not sound like my experience. So I was jealous for about three or four days and then I had an epiphany, realizing Berkeley is really what I wanted. It took me a little while to figure this out, but I haven’t looked back since. Pre-Covid, I used to go to Sproul Plaza at lunchtime and just soak up all the energy. I became a fan very quickly.

Disclaimer: The views published in this journal are those of the individual authors or speakers and do not necessarily reflect the position or policy of Berkeley Economic Review staff, the Undergraduate Economics Association, the UC Berkeley Economics Department and faculty,  or the University of California, Berkeley in general.

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