Varieties of Capitalism Essay Example | Topics and Well Written Essays - 1250 words

Varieties of Capitalism - Essay Example Resource allocation can be taken at all levels, but resource ownership is a totally different aspect. Ownership of resources takes three forms: public ownership, private ownership or a mixture of the two in an agreed proportion. This is where capitalism comes in. Resources in an economy are managed through the employment of means of production, in a bid to satisfy the needs and wants of populations in societies through making economic decisions. Resources in an economy can be privately owned through an economic system referred to as capitalism. Income and/or profit earnings are the primary interest of individual or corporate capitalists. Interactions of all stakeholders in capitalistic activities are undertaken in a market environment that lacks government control. Varieties of Capitalism Hall and Soskice (2009, p.404) note that capitalist economies are of two types; that is liberal and coordinated market economies. These two types of market economies are crucial in highlighting inst itutional variations across the developed economies in bid to assess the applicability of capitalistic activities in the economies. In order to do so, the variables that define each of the two market economies are considered in terms of practice and aspects of application. Static vs. Dynamic Both liberal and coordinated market economies have their static and dynamic aspects. ... This has helped shape the static and dynamic properties in the context of varieties in capitalism. Static properties in the liberal market economies are seen in the hierarchy structure of institutions in the market, employment trends, level of wage bargaining and in the adoption of changes, especially innovation. Innovations are radically put in place even when they are readily available for the market. On the other hand, static properties in coordinated market economies are experienced in the relations between and among different stakeholders in the market. Non-market relations in this market economy hardly change over time. Dynamism is associated with the occurrence of changes and adoption of relevant changes that enhance the functionality of an economic system. Different political economists consider this aspect in numerous ways, but the underlying factor is that change is inevitable. In the case of liberal market economies, equilibrium point of the market keeps changing, and so a re the institutional functions of competition and policy making (Crouch, 2002, p.239). On the other hand, the coordinated market economies are uniquely dynamic. Collaborative efforts between and among key stakeholders keep changing, and it is, therefore, dynamic in that regard. Innovation is highly incremental from time to time as deemed important. Equilibrium-based vs. Evolutionary The two market economies that make up capitalism are characterized by equilibriums. In the liberal market economies, forces of demand and supply play a fundamental role in the moving the market and the entire economy. Competition is high among individual firms and business entities. Policies in this market are more oriented towards deregulation and realization of tax breaks (Jackson, 2003,