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IC 333 Final Review_StudyGuide

IC 333 Final Review_StudyGuide - ILRIC-333 The Wonderful...

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ILRIC-333 “The Wonderful World of Capitalisms” by Hancke and Soskice I. Most analysis of capitalism focus on the macro level and the org of the welfare state a. Doesn’t explain the factors for success II. A Row Between Two Families a. Modern organization theory says a business must deal with four problems that work through institutions i. Customers ii. Owners iii. Employees iv. And other businesses b. Market Structure i. Germany gets money from Banks ii. US gets money from stock market c. Cooperation i. American and Brittan co-operation is restricted due to anti- monopoly rules ii. German and Sweden have learned to live with strong unions d. EE and ER relations i. British and US EE relations depend on local power relationships between trade unions and management ii. Northern European countries and Japan have constructed training e. Two Types of Capitalism i. Liberal Market (USA) 1. Companies have a large degree of liberty in organizing labor relations 2. Training is seen a as a cost and a risk 3. Operates in legal frame to promote competition a. Compete via price b. Lead to innovation ii. Coordinated Market Economy (Germany) 1. Intensive process of negations involve strng trade unions 2. Highly developed education and training system 3. Banks pay an important role in business 4. Companies operate on cooperation and competition 5. More expensive but higher quality goods III. Institutional Equilibrium a. Germany i. focuses on long term training of EE if there is $$$ security ii. Collective agreements prevent poaching b. America i. Don’t train thoroughly, look to dismiss problems IV. Version of Capitalism in Competition a. Coordinated Market Economy
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i. Difficult to compete in terms of cost ii. Labor costs are high because of the labor relations iii. Long term relationship advantages make it hard to end iv. Impossible to induce rapid change or price competition v. Hard for new business since banks give money 1. established market such a Mercedes vi. Prices are high making a solution to unemployment impossible 1. caused by deflationary monetary policy b. Liberal Market i. Deregulated labor keeps costs down ii. Stock market allows for new competition to raise money V. Comparative Advantages a. “Comparative institutional advantages” over “natural comparative advantages” “Varieties of Capitalism: The Institutional Foundations of Comparative Advance” by Peter Hall and David Soskice I. Introduction a. Different political institutions – deviations from “the best practice” or more durable choices based on specific societies b. Perspectives on economic problems i. Modernization approach to comparative capitalism 1. Post-war decades 2. Main challenge was to confront developing nations about using prewar tactics to continue high rates of growth ii. Neocorporatism 1. 1970’s 2. Associated with the ability of a state to bargain with ER and Unions about wages, social/economic problems 3. Theory that if unions can internalities economic effects would help iii. Social systems of production 1. 1980’s and 1990s 2.
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