Anglo-Saxon economy

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Anglo-Saxon economy or Anglo-Saxon capitalism (so called because it is largely practiced in English speaking countries such as Australia, the United Kingdom and the United States) is a capitalist macroeconomic model in which levels of regulation and taxes are low, and the quality of state services and social indicators are weak. In addition, Anglo-Saxon economies generally are more 'liberal' and free-market oriented than other capitalist economies in the world.

Countries in mainland Europe (such as France, Italy and Germany) possess a macroeconomic model called continental capitalism, which involves greater amounts of regulation and taxation, generally resulting in lower income inequality, a lower poverty rate, stronger social indicators and more performant public services (such as health care, social security and education). The debate amongst economists as to which economic model is better, circles around perspectives involving poverty, job insecurity, social services, and inequality.

Some economists argue that the Anglo-Saxon economies result in high levels of income inequality, high levels of poverty, low levels of social wellbeing and poor social indicators such as health and life expectancy. Others take a more reductionistic approach and merely look at numbers such as GDP, PPP and unemployment.

A factual comparison may illustrate the difference: France and the United Kingdom both have populations numbering around 60 million inhabitants. This means both economies can be compared, more or less:

Per capita Purchasing Power Parity:

France: $29,316 (2005:IMF data)

United Kingdom: $30,470 (2005:IMF data)

Unemployment rate:

France: 9.6% (2005:IMF data)

United Kingdom: 4.8% (2005:IMF data)

Life expectancy (total population):

France: 79.73 years (2006 estimate:CIA)

United Kingdom: 78.54 years (2006 estimate:CIA)

Gini coefficient, measuring income inequality:

France: 32.7 (1995:CIA)

United Kingdom: 36.8 (1999:CIA)

Poverty rate:

France: 6.5% (2000:CIA)

United Kingdom: 17% (2002:CIA)

This comparison shows that in the Anglo-saxon model unemployment is relatively low compared to the continental model, but income inequality is considerably higher and the Anglo-saxon model leads to higher levels of generalized poverty. In recent years the United Kingdom has possessed a higher GDP per capita than France, but the measuring of a country's standard of living is based on factors such as income equality, access to health care, life expectancy, and poverty rate. With this in mind, the standard of living in France is higher than that of the UK, though other factors such as lifestyle, diet and health care delivery model are significant in this.

Disagreement over meaning

The term anglo-saxon to denote the English-speaking world originated from the standard French idea of le monde anglo-saxon. Anglo-Saxon more accurately refers 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. The expression became associated with an economic idea as it is used regularly in Europe, often to exemplify the economically "liberal" and socially "conservative" approach of the English-speaking societies of the UK and the US, in contrast to Europe's continental economy.

There is still a question amongst Anglo-saxons as to whether or not there really is such a thing as an "anglo-saxon" economy. The UK has much higher levels of taxation than the US and spends far more on the welfare state as a percentage of GDP. For example the UK spends 21.8% of GDP on welfare and state-funded healthcare, significantly lower than France or Germany, but still higher than Spain, Portugal or the Netherlands, all in mainland Europe, and far higher than the USA's 14.8%.

Considering these nuances, the term 'anglo-saxon' has become a universally shared and understood concept in the media. Journalists from Latin-America, the Middle East, Russia, Europe and Asia largely agree on what it denotes and use it frequently in texts that deal with the comparison of economic models.

Anglo-Saxon economy

Disagreement over meaning

References

See also