MATERIALES Y METODOS

As the second part of the theoretical framework that underlies the thesis, this chapter has opened the black box of the individual-state relationship and explored the implications of differences in such relationships. The aim was to link together the concepts of the individual and the state developed in the previous chapter in a more detailed way, and to present the politics of state traditions. After having gone over the essential elements of the constructivist institutionalist literature in the form of a discussion of the delimitations of the policy-arena and of coordinative and communicative types of discourse, the chapter has developed an argument about varieties of individual-state relationships based upon differences in legitimation regimes. The central point is that the different polities imply different justificatory narratives. The form/targeting and content of the latter influence the way policy- makers depict the individual, and hence how legislation is legitimated. As far as the political elements are concerned, the setup of the individual-state relationship must be seen as political as it narrows down the window of possible state interventions, and hence the sets of naïve theories that can potentially be facilitated. To use Bourdieusian language (Bourdieu 1980, 88), naïve theories are structuring and structured at the same time, structuring interpretations of the lived environment, and structured through particular individual-state relationship and polities.

In the following chapters the British and German polities and policies directed towards home ownership and mortgage markets are analysed in line with the literature review and the framework presented here. The case selection follows from the overall argument. As presented in chapter two, the British and German economies have been

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classified as displaying different, if not opposed, characteristics on a whole range of factors from internal firm structures to their banking system (Anderton 1999; Gospel et al. 2011; Hall and Soskice 2001, 19). As the argument is concerned with showing how differences in capitalist economies, more specifically in taken-for-granted perceptions, naïve theories, policy interventions and polities play out in practice, these cases have been picked to carve out what amount of difference can be found in these areas. From the literature, the UK is taken as the example of a simple polity whereas Germany is assumed to be a compound polity (Schmidt 2002a, 113). I thus follow the same logic than the VoC literature and the works in constructivist institutionalism, but apply a novel method to demonstrate that the political aspects of varieties in economic setups are more complex and layered as the current literature suggests.

The rationale is to demonstrate that not only do these varieties of capitalism feature different firm-specific variations, but that they are also characterised by differences in the way the individual, the state, and the economy are conceptualised in both economies. These variations then entail different approaches to policy-making when it comes to housing and mortgage market intervention, but also different political outcomes (Smith 1990). What is investigated is not only which conceptions of economic agency have been facilitated in the cases selected, but also which political consequences such differences had. Indeed, the central argument of the thesis is that once a particular constructivist framework is set out, it allows to investigate variations of socio-economic organisation that come with different positionings of the individual within them. As the individual-state relationship differs, so do its political features. However, the definition of the economic subject in relation to the state is always political, as developed in these chapters. The home ownership and mortgage markets

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then not only differ in how home owners and mortgagers are made sense of as agents within such market mechanisms, but also how such naïve theories are political in themselves.

For these two countries, the housing market has been opted as it displays very different price trajectories, especially as owned houses go (OECD 2005). But most importantly, the housing market is a space where the individual and state policies come together in a discursive way (Marston 2002). On the one hand housing decisions are taken by all of the citizens at some point in their lives, on the other hand due to the high amount of financial assets involved in this market, it plays an important role in the overall economy (IMF 2011). The very existence of housing policy is an indicator of a rationale for state intervention addressing the moral ends of the good home owner and good mortgager. Furthermore, there is potentially a reasonable degree of uncertainty in how to conceive of such a good as accommodation. Also, as housing is a domain that has traditionally been conceived of as a good that features at the edge of the private-public dichotomy, it is a topic that is susceptible to justificatory narratives as far as state interventions are concerned (Mortensen and Seabrooke 2008).

An investigation according to the concepts described here is therefore plausible, especially in the context of these economies displaying very different house price trajectories over the last decades. In other words, various types of accommodation have been valued according to different logics over time in the UK and Germany. The thesis argues that those differences cannot be explained without a closer look at the

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individual-state relationship in both countries in the context of state policies addressing the economic subject/self. As the most recent house price boom gained momentum in 1997, that is the start of the time frame under investigation. The end date is 2007 when British house price dropped rather dramatically in the midst of what is now called the credit crisis (Lanchester 2010).

The respective mortgage markets were added to the analysis as most of the explanations of the British house price bubble lay with the credit regulations around mortgages that fed into the housing market (Crouch 2009; Young 2009; Brassett et al. 2010). The connection between the two spheres is not only purely economic (Miles 2011), but also relates to the naïve theories held about them. Indeed, as a mortgage is often a tool to enter the housing market, the individual potentially sees the two domains as closely linked. Indeed, mortgages or loans are products that most of the households come across in their life at some point. This means that they have some conceptions of what they are and how and why they can be made use of, for themselves and as products in specialised markets. At the same time, if mortgages are essential to the economy, then state policies could address them as well. In other words, mortgage markets are a place where the individual-state relationship plays out. The same observation period is taken here so to analyse state interventions and households behaviour in the two markets in parallel. The hypothesis then is that similar naïve theories and legitimation regimes are found for the two economic spheres within the same economic setting, and that differences are observed between economies.

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