Varieties of Capitalism
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This 4 page Class Notes was uploaded by cwalterman on Friday October 9, 2015. The Class Notes belongs to PSC2439 at a university taught by Christopher Mitchell in Fall. Since its upload, it has received 91 views.
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Date Created: 10/09/15
Varieties of Capitalism 32615 Key Terms Liberal economy Corporatism StatismState Capitalism Peak Associations States vary by development level size States vary by national economic system Statemarket socialistcapitalist spectrum Varieties of capitalism Liberal capitalism Corporatistorganized capitalism Statist capitalism Minimal quotNightwatchmanquot state role State doesn39t plav a bio role in economv Atomized Inter rm relationships We don39t like cartels things should be competitive Con ictual labor rm relationships Stock marketbased nancial systems Most common in AngloAmerican states D innovative rapid short growth prone to crises and bad at development Strengths Most innovative form of capitalism Steve Jobs Bill Gates Best at rapid shortterm drowth Minimal state role depoliticizes the economy Simplest model to organize Weaknesses Most prone to crises Worst at londterm plannino because everybody is focused on the shortrun it39s hard to focus on the longrun Bad at development it39s a longterm project that s expensive Seen in Britain and US E state places a coordinating role to help business and rm interests Peak associations pyramid some actors meet and discuss interests Corporatism IS NOT ruled by Corporations This will be a question on the nal exam State plavs a coordinating role it helps coordinate business and rm interests Cooperative relationships among private actors Based on quotpeak associationsquot just as private as liberal capitalism but the idea is have all representatives of the economy meet in a room but only a few people Private bankbased nancial system Seen in Germany Japan and small European states Organize all major sectors into pyramids labor capital and agriculture then have regional interests somewhere in the middle and at the tip of those pvramids is the peak association Get representatives of major industries banks and unions and all get together in a room and look at demand and fall to shift production The representatives will have an agreement and shift the focus of these industries without disruption and a lot more organization than liberal capitalism lt39s highly adaptable to rms and respond to market shift much more quickly than in liberal market systems Engage in higher worker training German model union pays for your corporate training because it has an agreement with the rms japan agree with other rms that thev won39t poach each other s emplovees Strengths Most adaptable form of capitalism it39s much better at adaptation to market change which is why it39s more popular in smaller states due to not that many sectors in economy Best at maintaining social peace and striking deals Better at longterm planning rms aren39t at cutthroat competition so can think ahead Better at creating a highskilled workforce Weaknesses Hard to implement Not innovative Harder in large countries Liberal Better at innovation corporatist better at adaptation re nement New products from liberal economies US UK Highend products from corporatist economies Japan Germany Finland Automobiles computers etc US creates the smartphone but it39s perfected in Japan same with cars and the train Liberal better at orowth corporatist better at stabilitv Liberal economies have higher peaks and valleys prone to crises Liberal economies do better in good times Corporatist economies do better in bad times Equally privately owned and free market E state helps banks and large enterprises but still privatization State helps the industries yet it39s not fully socialist Plays an active role in economy State ownership is common usuallv owns banks and funds certain sectors or provide less money to sectors to control economy State bank based nancial system Labor rm relations may be con ictual France to 1980s dirigisme State owned manv kev industries and bank but rest of economy was free market Once France abandoned it then people were don39t with statist capitalism China from 1980s Strengths Easy to avoid big downturns Good for directed development because states have a lot of money and can fund certain projects Better at maintaining social peace than liberal Politicized economic policy good for nonmarket goals strategic investment social harmony Weaknesses Hard to pressure politically connected sectors to adapt Encourages investment based on political strength not economic viability Less ef cient than liberal and corporatist models Statism is better at develobment Easier to direct investment toward longterm goals but what will happen to China when they reach the same point that France did in the 805 Statism is better at managing social pressures State can pursue noneconomic goals But comes at a cost in economic ef ciency Statism is less economicallyef cient in advanced economies Investment directed for political not economic reasons France abandons dirigisme Statism in 19805
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