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Journal Models of Capitalism

This article talks about different models of capitalism delineated by different

authors. Some of them mentioned about dualist approach and some went beyond

the two dimensions to explain the models in multi pronged way. I could also see thatone model of capitalism cannot be applied across different countries and is not

replicable. The historical legacy is paramount in shaping a countries economy. For

example, Sweden is the country, which instituted capitalism after having a long,

solid, and a rich history of socialist market. There have been numerous studies that

strived to establish empirical reasons of existence of different forms of capitalist

markets in the world. One of the reasons is the historical legacy of the country. In

the class we talked about a time when, with the advent of the labour Party, the U.K.

government slapped 147% marginal tax rate on its citizens. This move was

specifically targeted for the wealthy elite but it was not received and disseminated

in a proper way. The major lesson from this article is that whenever a policy is

instituted, the repercussions across the board should be thought through. In this

article, the author has cited various theories to describe different forms of

capitalism. One of them was Peter Hall and David Soskice study, in which thy talked

about two different forms of innovations: Incremental and Radical. They

categorically stated that incremental innovation fits perfectly Coordinated Market

Economics whereas radical innovation is more closely related with Liberal Market

Economics. For Instance If Microsoft releases a patch or an update for its operating

system, it will be considered a radical innovation whereas if a motor industry comes

up with a revolutionized product, it will still be considered incremental innovation

since the motor industry is a more traditional and an old industry as compared with

Information Technology industry. In LMEs, company do not invest much in training

and honing employee skills to facilitate incremental innovation rather they freelabour markets coupled with external shareholders facilitates radical innovation.

Various other models have surfaced explaining country wide differences of

capitalisms, however, the learning is that any change in the economy of a country

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has a great deal to do with the historical legacy, present strategy map and future

courses of action.