Anglo-Saxon capitalism, also known as the Anglo-Saxon model, is a form of free-market economy practiced by the rich English-speaking nations such as the United States, United Kingdom, Canada, Australia, Ireland and New Zealand.
It is a free-market model that emerged from the Chicago School of Economics in the 1970s, and dates back to the ideas of classical economist Adam Smith (1723-1790), known as the father of modern economics.
Anglo-Saxon capitalism contrasts with the Rhine capitalism of Germany (German Model) and the Nordic Model practiced by the Scandinavian nations. In the English-speaking nations, levels of taxes and regulations are low, while the public sector provides comparatively fewer services.
There is a certain amount of rivalry between supporters of the Anglo-Saxon and European economic models.
Anglo-Saxon capitalism has fewer regulations
The Anglo-Saxon model also has stronger property rights and contract enforcement. There are lower barriers to free trade, while doing business is said to be generally easier. Labor markets are also less regulated.
The German and Nordic Models, also called the continental economic model or European model, are more state-controlled and focus on wealth distribution.
Supporters of the Anglo-Saxon model argue that it is better at promoting innovation and creating competitive advantages that result in greater overall wealth.
Advocates of the continental model say their system has less inequality and lower levels of poverty.
The Financial Times Lexicon says the following about Anglo-Saxon capitalism:
“The “Anglo-Saxon” variant of capitalism is thought to be characterized, at the level of states, by lower taxes, looser regulation, a weaker social-safety net and greater ease for firms to hire and fire employees – and to take each other over. At the level of individual firms and businesses, Anglo-Saxon capitalism is said to emphasize the interests of shareholders, rather than other stakeholders such as employees. Its critics say that it emphasizes short-term profits at the expense of long-term planning.”
Economists say there are several countries with Anglo-Saxon capitalist systems that are not native-English speaking nations. Examples include the economies of Spain and Greece and some newer members of the European Union.
Video – The Anglo-Saxon model