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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 and the Republic of Ireland) is a capitalist macroeconomic model in which levels of regulation and taxes are low, and government provides relatively fewer services.
The term Anglo-Saxon to denote the English-speaking (anglophone) world originated from the standard French idea of le monde anglo-Saxon. The term refers to a particular culture which strongly features capitalism and Protestantism. A link between Protestantism and capitalism was described by Max Weber in his observation of 19th 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.
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 Reform, Katinka Barysch writes,
|“||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. 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. 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). 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, while defenders of continental models counter that they produce lesser inequality and lesser poverty at the lowest margins.