Britain and the European Social Model: Capitalism Against Capitalism?

Hyman R | Working Paper 19 | Institute for Employment Studies | Oct 2008

It is common to argue that ‘Anglo-Saxon’ capitalism differs fundamentally from that of continental Europe, and that this contrast results in incompatible systems of industrial relations.

This paper outlines some of the key arguments which suggest that Britain and the rest of Europe – or at least, continental western Europe – represent incompatible varieties of capitalism, and explores this further by considering some of the meanings of that elusive concept, the ‘European social model’.

The paper looks at the complex interconnection between economic integration and social (or labour market) regulation within the EU. It goes on to examine how European regulation has contributed to the transformation of British industrial relations which has occurred over almost four decades of British membership. Finally the paper indicates some possible influences in the reverse direction, leading to the question whether Britain is now spearheading the transformation of continental Europe into an Anglo-Saxon variant of capitalism.

This paper was commissioned by IES as part of its Visiting Fellows scheme, marking the Institute's 40th anniversary.