The term “Anglo-Saxon economy” refers to an economic model of capitalism. The use of the Anglo-Saxon name in its name reflects the fact that it is practiced mainly in English-speaking countries such as the United States, the United Kingdom, Ireland, Canada, Australia and New Zealand. At its most basic level, an Anglo-Saxon economy applies low levels of government taxes and regulations. It promotes less government involvement in the provision of public services and greater freedom for private property and commercial rights. Its goal is to make activities easy to carry out in order to sustain economic growth. The common belief behind this economic model is that change should occur naturally rather than suddenly. In this perspective,
Origins of the Anglo-Saxon economy
The origins of this free market model date back to the 1700s and to the economist Adam Smith, who is often considered the father of modern economics. He believed that self-regulation would lead to economic growth, a concept similar to the laissez-faire economy. This idea was expanded by several economists in the first and middle 1900s. These theories are now referred to as the Chicago School of Economics which led to the Anglo-Saxon capitalist model of the 1970s. This acceptance of a liberal market economy was motivated by a period of economic stagnation and inflation which led to the rejection of a previously practiced Keynesian economy.
Supporters of the Anglo-Saxon economic model argue that it encourages entrepreneurship because it facilitates the conduct of business given the reduced level of government involvement. This ease of doing business presumably allows companies to focus on the interests of shareholders rather than their employees. Furthermore, it is said to lead to market competition. This competition fuels innovation that translates into greater wealth generation. According to this model, private companies that are unable to work creatively and efficiently will cease their activity, creating more opportunities for new initiatives.
Opponents of this capitalist model claim that it focuses too much on earning profits as quickly as possible, and therefore does not place enough emphasis on long-term planning and sustainability. Critics argue that the focus on ease of business and the reduction of government interference translates into job insecurity, reduced social services and increased social inequality. This is because the Anglo-Saxon model focuses on the interests of private companies, which are believed to lead to a healthy economy.
Other critics suggest that, due to the fact that shareholders’ interests are more important, it promotes inequality between employees and other stakeholders. This inequality, in turn, translates into higher levels of poverty. One theory even suggests that the liberal economy of 1970 contributed to the global economic crisis of 2008. Others are opposed to this argument because not all countries with Anglo-Saxon economies have been affected in the same way.
Types of Anglo-Saxon economic models
Some researchers suggest that not all liberal economy models are created in the same way. Instead, there are subtypes and variants of Anglo-Saxon capitalism practiced in all English-speaking countries. These variations include the “neoclassical model” and the “balanced model”. The American and British economies show more than a liberal neoclassical economy while the Australian and Canadian economies are considered balanced. Different interpretations of the Anglo-Saxon school of economic thought have led to political differences within these countries. These policies then continued to determine the relationship between the public and private sectors. In the United States, for example, the government applies significantly lower tax rates than the United Kingdom.