week 2 Flashcards
(10 cards)
What are Liberal Market Economies (LMEs)?
A1: Capitalist systems like the US and UK where firms coordinate primarily through markets and competition rather than collaborative institutions.
What are key features of LMEs in industrial relations?
*US: Limited collective bargaining; individualised contracts
*UK: Industrial relations largely decentralised, with minimal union influence and flexible labour markets
How do LMEs manage employee relations?
*Market-driven, individualistic contracts
*Emphasis on performance-based pay
*Weak unionisation and no obligation for representative bodies
What characterises education and training in LMEs?
*Focus on general skills
*Little support for vocational or industry-specific training
*Problems with “poaching” and underinvestment in firm-specific skills
How do LMEs approach corporate governance and financial markets?
*Shareholder-oriented systems
*Strong role of financial markets (e.g. stock markets, venture capital)
*Short-term profit maximisation and risk of hostile takeovers
How do LMEs manage inter-firm relations?
*Competitive and arms-length
*Weak industry coordination
*Relational contracts are hard to maintain due to shareholder focus
What are examples of recent changes in the US LME model?
*Strategic industrial policy (e.g. CHIPS Act, reshoring)
*Government incentives for domestic supply chains
*Rise of state intervention for national resilience
What is institutional change in LMEs driven by?
*National security
*Geopolitical pressures
*Technological and manufacturing strategy (e.g. Biden’s IRA, Trump’s tariffs)
What is the Moderna case an example of?
*LME innovation model using venture capital and IP
*COVID-19 response revealed increasing state coordination
*Blending of public and private sector strategies
Is a hybrid model emerging in the US?
Yes. While rooted in liberal markets, the US is showing signs of increased state coordination in strategic sectors — a shift toward “strategic capitalism.”
