Coordinated Market Economies Analysis

When comparing countries that utilize a Liberal Market Economy and countries that use a Coordinated Market Economy, it is clear that each type has its own advantages, but the advantages are not equal in magnitude. Coordinated Market Economies provide more equality for workers and ensure that everyone’s voice matters when discussing important decisions. Conversely, Liberal Market Economies are less equal and tend to benefit less people. Many believe this to be a result of political structure. Furthermore, CMEs afford everyone the opportunity to advance in some skills due to extensive training, while many people in LMEs fail to receive such training. This stems from CMEs and LMEs focusing on different types of skill development. Ultimately, CMEs ensure greater job security via training and coordination; however, one could also consider this a weakness from the LME point of view. From the LME perspective this characteristic hinders business and progress. While this is true, the …show more content…
CMEs innovate through “incremental innovation,” which entails “ … continuous but small-scale improvements to existing product lines and production processes” (Hall and Soskice, 2001, pp.39). Innovation may not be as rapid compared to LMEs, but it is more stable and long term. Furthermore, “incremental innovation” also relates to the existence of job security and training programs in LMEs in that it “should be most feasible where corporate organization provides workers with secure employment … and opportunities to influence the decisions of the firm, where the skill system provides workers with more than task-specific skills … (Hall and Soskice, 2001, pp.39). “Incremental innovation” stems from the equality that CMEs contain, and the emphasis on equality outweighs the benefits that come with the ability to innovate rapidly. Thus, CMEs are more effective due to the ability to innovate without sacrificing