Globalization, Technology, And Political Economic Change

1874 WordsDec 15, 20148 Pages
Globalization, Technology, and Political Economic Change in the Modern Era The institutions which characterize modern European and American political economies have existed since the Great Depression. These institutions were established to set formal rules dictating how economic agents interact and how governments organize these agents. By examining these institutions and the coalitional relationships and complementarities that they form, economists David Soskice and Peter Hall identify two organizational forms, which they term two “varieties of capitalism” (VoC) – the coordinated market economy (CME), which describes Germany and other states with centralized wage setting, and the liberal market economy (LME), representative of the United States where individual actors and market forces set wages . However, international economic and technological changes are altering the economic landscape, exemplified by growing wealth inequality, and how nations interact, potentially redefining the institutions by which these economies are identified. Globalization is defined as increasing integration of economic institutions, decreasing costs of communication and liberating trade . The decreasing costs of doing business around the world are changing how firms are managed and how they invest, potentially blurring the lines between CMEs and LMEs. Technology has induced a transition from the Fordist economy of post-World War Two toward a service-based economy. This transformation has
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