Lecture 2 Flashcards
What are the forms of capitalism?
- Anglo-Saxon: UK
- Continental: Germany
- Nordic: Norway
- Mediterranean: Italy
What is the anglo saxon model?
Market: Unregulated Tax base: Low Industrial relations: Flexible/variable Welfare system: Safety net Economic function: Private sector/ privatization
What is the continental model?
Market: State intervention when needed Tax base: High corporate tax Industrial relationship: partnership Welfare system: inclusive Economic function: Private/pubic partnership
What is the Nordic model of capitalism?
Market: unregulated/ state as watchmen
Tax base: Low corporate tax, high income tax
industrial relations: Partnership/ regulated
Welfare system: Strong
Economic functions: Private sector
What is a mediterranean model of capitalism?
Market: Hybrid Tax base: Low Industrial relations: weak unionization Welfare system: Minimum economic function: Private/ stratigic
What is relations in industry?
ow are relations between
employers & employees
organised?
What is the role
of government in
that organization
What is the link between governance and models of capitalism?
All models mean government interference to some degree.
Governments issue governance in congruence with model of capitalism
What is governance?
Intervention trough policy. (besturen (act of governing)) Mostly by state, but also other organisations.
How are model of capitalism, state intervention and governance intertwined?
Models of capitalism are patterns of goverment intervention, what in reality = oatterns in governance
OR
Model of capitalism = form of structural state intervention, = pattern of consistent governance
Why governance?
State intervention should guarantee certain (morally) desired outcomes.
(E.G. ‘ A responsible financial sector’ from the big short)
How do (Morally) desired outcomes & model of capitalism correlate?
A state’s model of capitalism serves as a structural way of trying to attain that outcome
A (Morally) desired outcomes can be “guaaranteed via: A free market (Anglo-saxon) or state intervention (Nordic).
A free market leads to the desired otcome of individualism.
Or state intervention leads to a collective good
What is the catch by governance?
Internationalisation & neoliberalism
Why is internationalisation & neoliberalism a catch?
The idea that different models of capitalism continue to exist
in Europe has been questioned in recent years as European
economies have been subject to increased pressure from the
international economy.
> Increasingly, varieties of capitalism appear less as different
forms of capitalism and more as different types of
neoliberalism.
What is neoliberalism?
Neoliberalism refers to the free market economic ideas that
are often associated with the Anglo-Saxon model of capitalism:
privatization, deregulation, and less state spending
What for impact had the financial crisis and neoliberelism europe?
Neoliberalism = trust in free market, everywhere on earth, upheld/enforced politically:
- Less regulation and oversight, less political influence
- Increase of economic traffic & increasing interdependence of financial institutions
- fraudulent CDOs “Let’s make some money whataya say”,
- Implosion & crisis of the system
Why where taking over banks “to big to fail”/ Why did the european bank failed/flawed
- Failure of regulation & protection
- No over-/ & insight in politics - Euro as common currency flawed process
- Integration without taking differences in account - Preservation of system = bank(er)s, state
(= taxpayers) took over debts
Austerity( bezuinigen) followed
What are arguments for austerity?
- More competitiveness, compete
out of the crisis - Less debt means more attractive
economy internationally - More international investment by foreign firms
- Force jobless people to find a job
- Means less wages, means reducing cost of business, means more competitiveness
What are arguments against austerity
- Takes money out of economy, should invest!
- Debt can be paid back as soon as
economy is getting back - Hits the poorest the hardest
(‘blame immigrants and the poor’,
while it was the bankers…) - Poor spend more! Or more direct…
- More expenditure means more income
How did the financial crisis end?
Neoliberalism prevailed:
The bank bailouts and austerity politics post-crisis have shown
that there has been no move towards changing the neoliberal
system of economic governance
How did the financial crisis end?
Neoliberalism prevailed:
The bank bailouts and austerity politics post-crisis have shown
that there has been no move towards changing the neoliberal
system of economic governance
