ABSTRACT
Political battles that occur with owners of capital on one side, and labor and landed interests on the other, are labeled class conflict. When capital owners win, an owner-oriented liberal market economy arises, as in pre-World War II Japan and France. A low level of government intervention is expected, along with private pensions, centralized banking arrangements, pyramidal corporate ownership, and a heavier reliance on equities markets than when labor and farmers dominate. When landed interests and labor win, economy-wide banking prevails, which corresponds to Mediterranean capitalism, as exemplified by post-World War II France. A high level of government intervention is likely, as well as public pensions, a combination of centralized and decentralized banking arrangements, concentrated corporate ownership and a lighter reliance on equities markets. In this chapter I discuss these two outcomes, with the three cases just mentioned.
