Anglo-Saxon economy (economic model)

An Anglo-Saxon economy or Anglo-Saxon capitalism (so called because it is supposedly practiced in English-speaking countries such as the United Kingdom, the United States, Canada, New Zealand, Australia [Mitchell 2006, p.116. Mitchell groups all the preceding countries under a heading "Anglo-Saxon model or liberalist-individualistic model".] and the Republic of Ireland [Sapir 2006, p.375] ) is a capitalist macroeconomic model in which levels of regulation and taxes are low, and government provides relatively fewer services.

Origins of the term

The term "Anglo-Saxon" to denote the English-speaking world originated from the standard French idea of "le monde anglo-saxon" [The English-speaking world is also sometimes referred to as the Anglosphere] . The term refers to a particular culture which strongly features capitalism and protestantism (in the case of the UK, some form of Anglicanism). A link between protestantism and capitalism was described by Max Weber in his observation of 19^th century Germany, "The Protestant Ethic and the Spirit of Capitalism".

A common usage of "Anglo-Saxon" in the English-language media relates either to the language spoken in the area which would become England, or the people of these areas, after the arrival of Germanic tribes, primarily Angles and Saxons, in the 5th century. This usage is not linked to the use of "Anglo-Saxon" to refer to modern economic models.

Disagreements over meaning

Proponents of the term "Anglo-Saxon economy" state that Anglo-Saxon economies are more "liberal" and free-market-oriented than other capitalist economies. However, those who disagree with the use of the term claim that the economies of the Anglosphere differ as much from each other as they do from continental European economies. For example, in an essay for the Centre for European ReformBarysch 2005] , Katinka Barysch writes,

cquote
Is the gap between the Anglo-Saxon economic model and the continental one really that big? On closer inspection, there are as many similarities as there are differences. More importantly perhaps, there are signs of convergence. - Katinka Barysch, Centre for European Reform, 2005

Differences between Anglo-Saxon economies are illustrated by taxation and the welfare state. The UK has a significantly higher level of taxation than the US [Tax as fraction of GDP, UK: 37%; US: 26.8%. From List of countries by tax revenue as percentage of GDP] . Moreover, the UK spends far more than the US on the welfare state as a percentage of GDP and also spends more than Spain, Portugal, or the Netherlands, all of which are in mainland Europe [The UK spends 21.8% of GDP on the welfare state as compared to the US, which spends 14.8%. Data from the article: Welfare state] . This spending figure is however still considerably lower than that of France or Germany.

Most countries on continental Europe (such as France, Italy and Germany) possess a macroeconomic model called continental capitalism (also called "Rhenan capitalism" [The term was coined by Michel Albert, although can be applied specifically to Germany. See Joerges et al. 2005, p.30.] ). Yet some, such as Katinka Barysch, see Spain and also the newer members of the EU as (non-English-speaking) examples of "Anglo-Saxon" economies. The debate amongst economists as to which economic model is better, circles around perspectives involving poverty, job insecurity, social services, and inequality. Generally speaking, their advocates argue that more liberalised economies produce greater overall prosperity [Dale, 1999] [Reinhoudt, 2007] , while defenders of continental models counter that they produce lesser inequality and lesser poverty at the lowest margins [Richter, 2003] [Schifferes, 2005] .

References

Bibliography

*cite paper
first=Katinka
last=Barysch
title=Liberal versus Social Europe
version = CER Bulletin, ISSUE 43
publisher=Centre for European Reform
date=August-September 2005
accessdate=2007-11-23
url=http://www.cer.org.uk/articles/43_barysch.html
* cite news
author=Reginald Dale
title=Japan Is Transforming Its Economy
url=http://www.iht.com/articles/1999/11/26/think.2.t_4.php
work=Thinking Ahead / Commentary
publisher=International Herald Tribune
date=1999-11-26
accessdate=2008-04-07
*cite book
publisher=Routledge Cavendish
pages=227
last=Joerges
first=Christian
coauthors=Strath, Bo; Wagner, Peter
title=The Economy as a Polity: The Political Constitution of Contemporary Capitalism
date=2005
isbn=1-8447-2070-5
*cite book
publisher=Edward Elgar Publishing
pages=250
last=Mitchell
first=William
coauthors=Joan Muysken, Tom Van Veen, Centre of Full Employment and Equity
title=Growth and cohesion in the European Union: The Impact of Macroeconomic Policy
date=2006
isbn=1-8454-2611-8
* cite news
author=Jurgen Reinhoudt
title=Showtime for Sarkozy
url=http://www.american.com/archive/2007/october-10-07/showtime-for-sarkozy
work=Economic Policy
publisher=The American
date=2007-10-29
accessdate=2008-04-07
*cite web
url=http://www.indymedia.org.uk/en/2004/10/299588.html
title=Rhine Capitalism, Anglo-Saxon Capitalism and Redistribution
accessdate=2008-07-04
date=2003-11-15
author=Richter, Eberhard
coauthors=Fuchs, Ruth
format=Excerpt, English translation of German original
work=The Future of Social Security Systems (Conference)
publisher=Indymedia UK
*cite journal
volume=44
issue=2
pages=369–390
last=Sapir
first=André
title=Globalization and the Reform of European Social Models
journal=JCMS: Journal of Common Market Studies
accessdate=2008-04-06
date=June 2006
url=http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-5965.2006.00627.x
doi=10.1111/j.1468-5965.2006.00627.x
format=abstract
*cite news
author=Steve Schifferes
title=Blow to EU economic reform hopes
url=http://news.bbc.co.uk/2/hi/business/4602565.stm
work=Business
publisher=BBC News
date=2005-06-02
accessdate=2008-04-07

External links

* [http://imf.org/external/pubs/ft/weo/2006/01/data/dbcoutm.cfm?SD=2003&ED=2007&R1=1&R2=1&CS=3&SS=2&OS=C&DD=0&OUT=1&C=132-112&S=PPPPC-LUR&RequestTimeout=120&CMP=0&x=85&y=7 IMF World Economic Outlook database]
* [https://www.cia.gov/library/publications/the-world-factbook/index.html CIA World Factbook]