Anglo-American Model

Anglo-American Model in Europe

Description of Anglo-American model

The Concise Encyclopedia of the European Union describes anglo-american model in the following terms: [1] Sometimes contrasted with the Rhine model, the British and US economic systems are based on deregulation, free markets, labour flexibility, decentralised wage bargaining, low government involvement in the productive sector and widespread share ownership. The emphasis on shareholder values and open markets is also associated with takeover bids, which reallocate assets – in theory to their most efficient user – abruptly and without prior worker consultation.

The corporatist Rhine model is more closely controlled by the banks, themselves heavily regulated by a central bank. The stockmarket is of less importance and takeovers are rare (see more in this European encyclopedia). Wage bargaining is industry-wide, trade union representatives often sit on companies’ supervisory boards, and government spending and the social costs of employment are high. Compared with the Anglo-American model the German system is said by its supporters to encourage long-term investment (as opposed to ‘short-termism’), greater stability of employment and a more socially compassionate approach to the workforce.

Like the Swedish model before it, however, the Rhine model is not without its problems. Its labour market inflexibility has led to the export of jobs to more adaptable economies. Moreover, the combination of unemployment and some slimming of benefits has put the traditional employer-employee consensus under strain. Continental industrialists are therefore beginning to look with increasing sympathy at aspects of the Anglo-American model and at the ‘third way’ compromise practised in The Netherlands.

Resources

Notas y References

  1. Based on the book “A Concise Encyclopedia of the European Union from Aachen to Zollverein”, by Rodney Leach (Profile Books; London)

See Also

Leave a Comment