The question as to whether capitalism is still good for Britain has been asked by a number of economists. The reason for such kinds of questions in this era is not particularly hard to discern. This is because capitalism has failed to provide adequate employment opportunities for the British population, bring down the tariffs, and has pointed as a major contributing factor to the turbulent economy. This paper seeks to analyze the distinctive features of the British model of capitalism. Towards this, the changes that have taken place in the British model of capitalism will also be dissected.
According to McCraw (1997), “capitalism relies heavily on investment credit as a means of financing innovation and in this respect; the term capitalism goes beyond the dictionary definition of capital which is an economic concept and a factor of production that is common to all economies”. The British model of capitalism was heavily influenced by Thatcher’s administration and policies. Heavily influenced by the Great Depression of the 1930s, there was no other option for the British government but to embrace “Keynesian medicine of government regulation” or contend with the reality of workers’ strikes. The analysis of such measures that were deemed as regulation was in true sense subsidization in the industries that were aimed at increasing g the demand of products from the industries during the periods of depression. Such steps define and differentiate the British model of capitalism from the German, USA and Japanese models.
Other distinctive features of the British model of capitalism are the radical economic experiment initiated by Thatcher since the times of the industrial revolution and the structure of the economic system. This fact is succinctly put forward by Scott (1997) in stating that “In 1973, one-fifth of the population owned all income from investment in the economy; within this category, eight percent owned three-quarters and of that, the top hundred wealthiest shareholders earned 1000 times the average wage”. This illustrates the structure of the economy was characterized by more investments and wealth in the hands of the few wealthy individuals. In addition to the above, the British model of capitalism is characterized by the maintenance of traditional norms that classified people into class structures based on wealth and social status. This fact is perhaps well illustrated by Bottomore (1991) in stating that “persistence of old-world noble privileges in British class structure, making it seem more rigid than some other countries”. This explains the reason why the British still maintains the role of the royal family as important of its political structure.
Available literature also points at other differences that include the fact that while in other countries such as the United States, capitalism has recorded growth since the great depression, in the case of British; the fact is that capitalism has recorded a decline. This fact is illustrated by Bottomore (1991) in stating that “decline of British capitalism in contrast to emergence of the US and then Japanese capitalism on the world stage.” The decline in capitalism within the structures is precipitated by the myriad of problems the nation encounters in regards to tariffs, unemployment and economic uncertainty. In fact, analysts predict that the future of capitalism in Britain is very slim. This is because a majority of economists believe that capitalism is the mother of all the ills thus leading to its sharp decline. The end of the British model of capitalism is well signaled by Dutt (2006) in succinctly stating that “There is no future on the basis of capitalism in Britain and unless we overthrow capitalism, not only decline, but final collapse and starvation await us.”
The changes in capitalism have been surrounded by controversies since Thatcher’s administration. According to Klimster (2005) and Sawyer (2005), “Capitalist growth depends upon two main conditions; firstly profits must be generated through production and secondly, those profits must be realized through the sale of what is produced”. The change in capitalism has been characterized by the decline in the volumes of productions within the British model. The “persistence until late into 19th century of the prominence of landowners, merchants and financiers in British upper class compared to industrialists” (Bottomore, 1991) recorded a major shift in that the industrialists took a major hold in the economy. In conclusion, the British model of capitalism has recorded major shifts and shaped the politics of Britain for decade.
References
- Bottomore,T.,1991.Classes in Modern Society.
- Dutt, P., 2006. Capitalism or Socialism in Britain? Web.
- Klimster, A., 2005. Where now for British capitalism?
- McCraw, T., 1997. Creating modern capitalism: how entrepreneurs, companies, and countries triumphed in three industrial revolutions. New York: Harvard University Press.
- Sawyer, M., 2005. The UK Economy. Worthington. Oxford University Press.
- Scott, D.,1997. The Path from Old Labour to Tory Neoliberalism to New Labour. .