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

Cambridge Centre for Business Research Working Paper No. 422

61 Pages Posted: 19 Sep 2011

See all articles by Suzanne J. Konzelmann

Suzanne J. Konzelmann

University of London - Birkbeck College - Faculty of Social Sciences, School of Management and Organizational Psychology; University of Cambridge - Faculty of Social and Political Sciences

Marc Fovargue-Davies

University of London - The London Centre for Corporate Governance & Ethics

Date Written: June 1, 2011

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.

Keywords: Corporate governance, Regulation, Financial market instability, Liberal capitalism, Varieties of capitalism

JEL Classification: E44, G38, N10, N20, P16, P17, P52

Suggested Citation

Konzelmann, Suzanne J. and Fovargue-Davies, Marc, Anglo-Saxon Capitalism in Crisis? Models of Liberal Capitalism and the Preconditions for Financial Stability (June 1, 2011). Cambridge Centre for Business Research Working Paper No. 422. Available at SSRN: https://ssrn.com/abstract=1929626 or http://dx.doi.org/10.2139/ssrn.1929626

Suzanne J. Konzelmann (Contact Author)

University of London - Birkbeck College - Faculty of Social Sciences, School of Management and Organizational Psychology ( email )

Malet Street
Bloomsbury
London, WC1E 7HX
United Kingdom
+44 (0) 207 631 6799 (Phone)

HOME PAGE: http://www.bbk.ac.uk/management/our-staff/academics/konzelmann

University of Cambridge - Faculty of Social and Political Sciences ( email )

ESRC Centre for Business Research
Cambridge, CB2 1TN
United Kingdom
+44 1223 337733 (Phone)

Marc Fovargue-Davies

University of London - The London Centre for Corporate Governance & Ethics ( email )

Malet Street Bloomsbury
WC1E 7HX
London, WC1E 7HX
United Kingdom

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