Anglo-Saxon Capitalism

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A system of capitalism characterized by extensive market coordination by economic actors and relatively neutral patterns of governmental market regulation aimed at maintaining property right institutions without privileging particular social actors. Though closely tied to liberal political theory, the term Anglo‐Saxon Capitalism was recently popularized by Michel Albert in his book Capitalism Vs. Capitalism (1993) and is central to recent research on ‘varieties of capitalism’. Anglo‐Saxon capitalism is associated with the United Kingdom and the United States, but also characterizes Canada, Australia, New Zealand, and Ireland. Non‐market or associational patterns of economic coordination are weak within Anglo‐Saxon capitalism. Markets or relatively short‐term pacts between firms are used to coordinate most patterns of economic activity. Unions, employers groups, or other social actors have few statutory bargaining rights within the economy or the governance of firms. Anglo‐Saxon capitalism is associated with generally deregulated labour markets, primarily firm‐level patterns of wage bargaining, a system of corporate governance dominated by the financial owners of the firm, and a system of finance depending primarily on capital market based financing rather than long‐term bank debt.

Political research on Anglo‐Saxon capitalism draws on liberal political theory and neoclassical economic thought. Within economic policy debates, advocates of the Anglo‐Saxon model note the strong economic performance of the UK and especially the US during the 1990s to bolster claims that the ‘liberal market’ model of capitalism is superior to the Rhenish version. Extremely flexible labour markets and financial markets within Anglo‐Saxon economies are seen as creating competitive advantages in newly developing or ‘radically innovative’ industries such as biotechnology or computer software.

Marxist scholars developed the earliest and perhaps most systematic critiques of Anglo‐Saxon capitalism, noting a high degree of inequality and a property rights system favouring the owners of capital over other ‘stakeholders’ within the firm. Critics have pointed to patterns of ‘social democracy’ associated with Rhenish capitalism and suggested that the introduction of a ‘stakeholder’ system of corporate governance within Anglo‐Saxon economies could have similar effects. Others have pointed to the historically short‐term nature of capital investments within Anglo‐Saxon economies, associated with the long‐term decline of industrial manufacturing and, according to critics, a shift from higher‐paying (and unionized) jobs to lower‐paying (and typically un‐unionized) jobs in the service sector.


Subjects: Politics.

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