From the TUC

How impressive are the Anglo-Saxon economies?

02 Sep 2011, by in Economics

One of the strong arguments put forward by neo-liberals is that deregulated market economies may not be fair but they bring home the bacon: if we learn to stop worrying about inequality, we will be happy to accept policies and greater prosperity. The English-speaking countries have gone furthest in doing this, powering faster growth – the ‘Anglo-Saxon model’.

Today, the US Bureau of Labor Statistics brought out the latest set of their wonderful series of international data. (Every time I use the BLS website I’m green with envy.)  I was looking at their table for GDP per capita, by country. This has figures for 1960 and 2010, so we can see how each country has performed over a long period and whether the English-speaking countries stand out. I used their table to calculate the growth in per capita GDP (so any errors are my own):

GDP per capita, 1960 and 2010, converted to U.S. dollars using 2010 PPPs, percentage increase (*)
Country
1960
2010
Increase (%)
S Korea
           1,510
         29,184
                 1,833
Singapore
           4,331
         58,240
                 1,245
Japan
           5,938
         33,612
                    466
Norway
         14,960
         55,938
                    274
Austria
         11,339
         39,928
                    252
Belgium
         11,441
         37,411
                    227
Italy
         10,320
         32,997
                    220
France
         11,062
         34,168
                    209
Netherlands
         13,850
         41,512
                    200
Germany
         13,003
         38,021
                    192
Sweden
         13,807
         39,407
                    185
Denmark
         14,084
         38,778
                    175
Canada
         14,436
         39,104
                    171
USA
         17,368
         46,844
                    170
Australia
         14,893
         39,497
                    165
UK
         13,610
         35,621
                    162

 That doesn’t really need much extra comment from me. Now, it’s important not to over-interpret this table. For one thing, the BLS table doesn’t include a figure for Ireland in 1960, and if they were included Irish growth would almost certainly be pretty impressive.

More importantly, this table shows how less rich countries have caught up with the countries that were rich in 1960. That’s especially true of the Asian countries, but it’s also true to a lesser extent for the European and North American countries.

But that isn’t the point. The neo-liberal line has been that the superior performance of the Anglo-Saxon model is blindingly obvious and only those of us with left-wing blinkers can’t see it. And it  simply isn’t so – countries we’re taught to sneer at, like Belgium and Italy, have had far superior growth over the long run, as well as the Scandinavian countries and Germany, which we’re used to seeing doing better than us.

 (*) This table originally understated each increase by 100 percentage points – this amendment does not affect the pattern of results or the point of the story.

3 Responses to How impressive are the Anglo-Saxon economies?

  1. Paul S
    Sep 7th 2011, 8:18 pm

    I’m confused by some of the figures. This is probably because of something I’m missing, but a number of the percentage increases don’t make sense to me. For example, an increase for the Netherlands of 13,850 to 41,512 would seem to me to be much more than 100% (~200% increase by my reckoning). Has there been some sort of adjustment for inflation or something to produce these differences?

    Thanks.

  2. Paul S
    Sep 7th 2011, 8:18 pm

    Actually, I’ve just checked and they’re all out by 100 by my calculations. Is this a standard adjustment?

  3. Richard Exell

    Richard
    Sep 8th 2011, 9:41 am

    Dear Paul,

    Thanks very much for pointing this out – yes, its a mistake, I programmed the wrong formula into my Excel sheet.

    Fortunately it’s a consistent error and the overall pattern remains the same, so the point of the post is unchanged – but I should have noticed this before posting, so thanks very much for pointing this out. I’ll amend the post later today.