The British Model of Capitalism and the Politics of Growth

Abstract

AbstractFocusing on Britain, this chapter delves into the politics of economic growth—a perennial question of political economy that is often discussed in the technocratic governance sphere in dry, technical, and depoliticizing terms. The chapter demonstrates how different views about the most desirable model of capitalism, including about the preferred mode of state intervention in the economy, underpin economic growth debates and imply their inherently political character. Comparative political economy debates about growth models and varieties of capitalism thus nourish and shape the politics of growth. Outlining competing constructions of economic reason, the chapter compares and contrasts four different theories of economic growth—neoclassical, Schumpeterian, Neo-Keynesian and ‘new’ growth theory approaches—and explores their relationship with stakeholder and shareholder models of capitalism. Charting the development and idiosyncrasies of a British ‘Anglo-Liberal’ financed-based growth model, it asks questions about the efficiency, stability, and coherence of growth models. It further places the political economy of UK capitalism in the context of the world economy, and considers how the politics of growth connects with deep-rooted anxieties about Britain’s place in the world. It considers how these anxieties play out in relation to Britain’s place in Europe, competing constructions of free trade, and the politics of Brexit. Previously dominant understandings of Britian’s place within liberal world order have been challenged in recent years by the Brexit vote, which called for the nostalgic renewal of an economically mighty ‘Global Britain’, but led the Office for Budget Responsibility to significantly downgrade the nation’s economic prospects.