Summary Varieties of Capitalism

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Criteria| LME| CME|
Mechanism| Competitive market arrangements(Market mechanisms)| Non-market relations| Equilibrium| Demand/supply andHierarchy| Strategic interaction among firms and other actors| Inter-firm relations| Competitive| Collaborative|

Mode of Production| Direct product competition| Differentiated, niche production| Legal system| Complete and formal contracting| Incomplete and informal contracting| Institutions’ function| CompetitivenessFreer movement of inputs| MonitoringSanctioning of defectors| Employment| Full-time, General skillShort term, Fluid| Shorter hours, Specific skillLong term, Immobile| Wage bargain| Firm level| Industry level|

Training and Education| Formal education from high schools and colleges| Apprenticeship imparting industry-specific skills| Unionization Rate| Low| High|
Income Distribution| Unequal (high Gini)| Equal (low Gini)| Innovation| Radical| Incremental|
Comparative Advantage| High-tech and service| Manufacturing| Policies| Deregulation, anti-trust, tax-break| Encourages information sharing and collaboration of firms| Example| USA, UK| Scandinavian countries, Germany|

Varieties of Capitalism - Peter A. Hall and David Soskice (cfr. slides)

Capitalism differs. Firms operate in different environments. This difference translates in different strategies. (“Companies tend to gravitate towards strategies that best fit …”.) There is a link between managers mindset and their culture. Different managerial mindsets across the globe. Although there is an exchange of ideas (via business schools etc.) some homogenization. Between CME and LME there are a lot of hybrid forms (e.g. China). Not market and not hierarchies organization. LMEs are not just markets, they are also hierarchies.

You can compare different states (in which countries are), but those differences or not constants. All markets change. The emerging markets are in a state of transformation...
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