Varieties of Capitalism and Convergence versus Divergence - Coursework Example

Varieties of Capitalism and Convergence versus Divergence Name Instructor Course Date Varieties of Capitalism and Convergence versus Divergence Introduction The configuration of a country’s employment is surfaced in different patterns of production profile, product line as well as the socio-economic tenets[Sch132]. Varieties of Capitalism provide viable challenge towards the existence of a singular form of capitalism especially in a free-market, which in turn influences the rate of employment. Capitalism advocates for the controlled interference of the government in the ownership of the means of production to eliminate the monopoly and bureaucracy in the employment and market. In this context, there are various types of capitalism advocating for different strategies in the production to arrive into different economic strength. Capitalists argue that private ownership of the means of production in a country create jobs instead of getting rid of the excess workers during the economic crisis to maximize on the profits[She12]. The varieties of capitalism are essential in explaining the different forms and rates of employment in various sectors and economic institutions. Varieties of capitalism and varieties of economic relations The breakdown of the distinguished types of economies provide platform under which the influence of the varieties of capitalism on the employment relations can be discussed. The coordinated and the liberal market economies are configured in the ways that are relevant in understanding the logic behind the employment relationship argument[Coa10]. In this sense, the liberal capitalism is designed in such a way that the economic activities are regulated by the economic agents through the competitive market arrangements. Overall market exchanges and formal contracts influence the employment relationships. However, the coordinated market economies capitalism, the means of production is opposed to the relationships and competition[Slu14]. The coordinated market economies employ the use of non-market coordination including the incomplete contracts and private network monitoring. While the coordinated market economies provide long-term relationships among the economic actors, the liberal market economies are configured to provide fluidity in market relationships. In the bid to understand the essence of the varieties of the capitalism in the regulation of the employment, it is important to evaluate the perspective of the importance of the system coordination as well as the idea of the institution complementarities[Bla102]. In this context, a country can be termed as capitalist due to the economic practices that allows the economic sub-systems to govern capital and labor. The varieties of capitalism posits that the availability of well configured sub-systems such as the financial system, labor market, training system and the inter-firm relations facilitates the productivity of the economic firms. Varieties of capitalism presume the existence of the systematic rationality governing economic activities that are separate from the social agreements. Comparison of Countries Employment Relations Proponents of the varieties of Capitalism argue that the economic growth is favored by the bearable innovation and expansion of economies[Mit11]. This in turn creates employment opportunities and therefore improving the living standards of the entire population. The more the income from the well developed and regulated means of production results into wide spread jobs creation and the inter-firm relations as well as the international employment develops due to the increased investors. Varieties of capitalism assist in explaining the differences and similarities in employment systems and practices due to the varying methods adopted by various forms of governments. The differences are surfaced in the ways the governments are structured, the role and the financial capabilities of the government and the privately owned firms in generating income and employment. For instance, in Germany the state and industry level limits enterprise while Australia, Japan and Korea are operating enterprise linkages. In spite of the growing industrialization and creation of jobs, the employment system differs in different countries. For instance, the industrialized Germany faces the challenge of balancing the wind of globalization and the ever-increasing social differentiation and individualization. However, when compared to the employment systems and practices in Netherlands, Germany’s system faces the challenge of integrating the social welfare in the labor market. The differences in the social structure and the performance of the labor market and economies efficiency lead to varying employment relations in these two countries. In addition, the countries adopted different political management skills and integrative dynamics that increase the stiff competition in the employment relations. Varieties of Capitalism and Economic and Employment Relations However, the collective bargaining and unilateral management decision making guided by the strategic-choice perspective impacts the employment relations and systems. China and Indian nations portray similarities in the employment systems because of the intensification of the international competition manifested in the globalization. In addition, the two nations employ the aspect of deregulation policies in the labor market that yields profound implications for employment relations. The avoidance of more individualized employment policies creates suitable employment relations. The capitalism approaches of the economic development and the employment relations are based on the ability of the market to determine the range of investments, distribution, production and making of the informed decisions[Kel13]. In the bid to increase the jobs creation and relations, various types of capitalism proves how a country survives the misery of high rates of unemployment[Sch133]. In this sense, the unregulated capitalism entails the deregulation of finance, enhances privatization and reduced tax for the high-income earners. In this context, the low-income earners are the job seekers while the high-income creates the opportunities through investments. The unregulated capitalism involves the flexibility of the labor market due to the minimal regulation in the hiring and firing of the labor force. In this context, the capitalists evaluate the role of the government and the private firms in terms of the efficacy in the exploitation of the economic resources. However, it is important to mention that country’s level of production and the availability of the economic resources dictate the mode of economic alignment[Ken14]. The sustainability of the similar forms of production tenets largely depend on the form of political influence within the country. The varieties of capitalism disregard the morality in the exploitation of the workers in the attempt to enrich the principal agents. Despite the ability of the financially empowered individuals in the generation of employment, the value of the individual workers is highly ignored in which the democratic governments oppose[Bis10]. Thus, the relations between the employment providers and the labor market remain strived due to the lack of mutual respect and responsibility. The similarities and differences in the employment relationships especially in capitalistic nation are highly recognizable depending on the common defensive mechanisms of the employment relationship. There is ample evidence regarding the criticality of the high rate of unemployment in relation to the adoption of the capitalism in a country[Hal10]. The unemployment and the increased underemployment is the machine used to drive the capitalism economy. In this context, the investors only create more employment opportunities with the increase in the profit margin. On the other hand, the number of the workers tends to reduce whenever the market share decreases thereby shrinking the possibility of the labor market expansion[Wal102]. The implication of the capitalism and the employment relations is that when the consumers are less, the labor force reduces to maintain the productivity giving the job creators the advantage of choosing from the high number of the unemployed. However, varieties of capitalism support the inter-country partnership and relationships in the economic development. In the same point, the globalization of the economic practices leads into integrated and increased economies of scales. Convergence versus Divergent Economies The globalization of the economic practices results into the adoption of common approaches leading to economic convergence[Utc10]. The convergent economies are characterized by the catch-up effects where the low economies per capita incomes grow at faster rates than well to do economies. The convergence indicates that a country transits from the initial stages of industrialization to a highly industrialized country while the means of production emerge to create a global culture as witnessed in China and India. The shared interests and the patterns of production culminate into the similar economic practices and therefore common logic in the industrialization. The advancement and adoption of the new world technologies and capitalism has greatly influenced the economic development of countries along same direction[Whi16]. The development has in turn anchored employment, which appear almost similar though not uniformly practiced across the involved regions. Convergence economy develops equilibrium between the economic institutions and the employers, reviewed employment structures and the diversification of the worker preferences aligning with the new forms[Dee14]. The leadership knowhow in managing the economic resources and techniques is essentially achieved through the dissemination of the best practices in the converging economy. Globalization work in unison with the convergence ideas to bring about the pluralism which in turn provide the ground in which different parties are entitled to different views regarding employment relations, employer, employee as well as the government. However, divergent economy influences the employment relations positively and/or negatively in the trial to eliminate the trade rigidity. Conclusion Varieties of capitalism influence the employment relations in different spheres of production such as the industrial and employee relations. The varieties are characterized with the liberal market economies and the coordinated market economies. Liberal market allow the flexibility of the problem solving, market relations and top management of the economic tenets while coordinated market economies is based on the behavior of the actors, information exchange, formal participation of the employees and agreement in decision making. It is important to highlight that the varieties of capitalism raises the concern of the collective bargaining, development of skills and competencies and employment flexibility. References Sch132: , (Schumpeter, 2013), She12: , (Shepard, 2012), Coa10: , (Coates, 2010), Slu14: , (Sluyterman, 2014), Bla102: , (Blanpain, 2010), Mit11: , (Mitchell, Ramsay, & Marshall, 2011), Kel13: , (Kelly & Frege, 2013), Sch133: , (Schröder, 2013), Ken14: , (Kenworthy, 2014), Bis10: , (Bishop, 2010), Hal10: , (Hall & Soslice, 2010), Wal102: , (Wallraven, 2010), Utc10: , (Utchay, 2010), Whi16: , (White, 2016), Dee14: , (Deeg, Wood, & Wilkinson, 2014), . Read More