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Anglo-Saxon Capitalism in Crisis? Models of Liberal Capitalism and the Preconditions for Financial Stability

Author

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  • Konzelmann, S.
  • Fovargue-Davies, M.

Abstract

The return to economic liberalism in the Anglo-Saxon world was motivated by the apparent failure of Keynesian economic management to control the stagflation of the 1970s and early 1980s. In this context, the theories of economic liberalism, championed by Friederich von Hayek, Milton Friedman and the Chicago School economists, provided an alternative. However, the divergent experience of the US, UK, Canada and Australia reveals two distinct 'varieties' of economic liberalism: the 'neo-classical' incarnation, which describes American and British liberal capitalism, and the more 'balanced' economic liberalism that evolved in Canada and Australia. In large part, these were a product of the way that liberal economic theory was understood and translated into policy, which in turn shaped the evolving relationship between the state and the private sector and the relative position of the financial sector within the broader economic system. Together, these determined the nature and extent of financial market regulation and the system's relative stability during the 2008 crisis.

Suggested Citation

  • Konzelmann, S. & Fovargue-Davies, M., 2011. "Anglo-Saxon Capitalism in Crisis? Models of Liberal Capitalism and the Preconditions for Financial Stability," Working Papers wp422, Centre for Business Research, University of Cambridge.
  • Handle: RePEc:cbr:cbrwps:wp422
    Note: PRO-2
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    File URL: https://www.cbr.cam.ac.uk/fileadmin/user_upload/centre-for-business-research/downloads/working-papers/wp422.pdf
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    References listed on IDEAS

    as
    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters,in: This Time Is Different: Eight Centuries of Financial Folly Princeton University Press.
    2. Carmen M. Reinhart & Kenneth S. Rogoff, 2014. "This Time is Different: A Panoramic View of Eight Centuries of Financial Crises," Annals of Economics and Finance, Society for AEF, vol. 15(2), pages 1065-1188, November.
    3. repec:hrv:faseco:30728041 is not listed on IDEAS
    4. Donald Brean & Lawrence Kryzanowski & Gordon Roberts, 2011. "Canada and the United States: Different roots, different routes to financial sector regulation," Business History, Taylor & Francis Journals, vol. 53(2), pages 249-269.
    5. Steve Keen, 2009. "Household Debt: The Final Stage in an Artificially Extended Ponzi Bubble," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 42(3), pages 347-357.
    6. Whitley, Richard, 2000. "Divergent Capitalisms: The Social Structuring and Change of Business Systems," OUP Catalogue, Oxford University Press, number 9780199240425.
    7. Amable, Bruno, 2003. "The Diversity of Modern Capitalism," OUP Catalogue, Oxford University Press, number 9780199261147.
    8. Quiggin, John, 1998. "Social Democracy and Market Reform in Australia and New Zealand," Oxford Review of Economic Policy, Oxford University Press, vol. 14(1), pages 76-95, Spring.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Corporate governance; Regulation; Financial market instability; liberal capitalism; Varieties of capitalism;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • P17 - Economic Systems - - Capitalist Systems - - - Performance and Prospects
    • P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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