Varieties of Capitalism

The title is that of a book edited by Hall & Soskise. Amazon link. The school of thought is new institutional economics. The editors' Introduction presents two varieties -- liberal market economies (LME) and coordinated market economies (CME). In LME firms are more competitive and outcomes are more the result of market transactions. In CME activities are more coordinated and cooperative and rely less on competition and markets. The authors name non-market relationships with trade unions, business associations, and government. I believe it could also include some advocacy groups.
.
The authors classify the economically bigger countries of the world as being LME or CME. Six are LME and include the USA and UK. Eleven are CME and include Germany, Japan, and the Scandanavian countries. They show GDP and unemployment number for each for 1961-98. Somewhat surprising to me was that the aggregate GDP numbers for the two groups were pretty close. The aggregate unemployment rates were significantly lower for the CMEs. The table of numbers can be seen on Amazon (page 20).

They use Germany as an exemplar of CME and the USA as an exemplar of LME. Some differences between them are:
1. Germany: Wages are set through industry-level bargains between trade unions and employer associations. Employees switching jobs and employers poaching hires from their competitors are less frequent. Finance is more institutional with close relationships between investors/lenders and the companies they invest in/lend to. Investors/lenders have longer outlooks.
2. USA: Wages are driven by a more active labor market, in which employers more often poach hires from their competitors, and workers are more mobile. Employers are more free to cut costs in a downturn by shedding employees. Finance is more dispersed with decisions made more by individual investors/lenders. Investors/lenders have a shorter outlook with greater focus on short-run financial results.