A functioning modern economy needs respect for property rights; a government that is able to collect taxes and offer a social safety net; banks that allow the payment system to function; markets that allow businesses to raise capital and so on. Once those essentials are in place, whether the right top tax rate is 40% or 50%, the right interest rate is 1% or 5% is largely a matter of trial and error, and of political acceptability.
Much is made of the difference between Britain’s “Anglo-Saxon” model and of France’s dirigiste approach, between the British government’s austerity drive, and France’s pro-growth approach. But for all the rhetoric, Britain’s GDP per head in 2011 was $36,090, according to the IMF, while France’s was $35,156, almost identical. Britain plans to balance its budget by 2017, and so does France.
Despite the small differences in outcome, economists will continue to debate the merits of the competing systems as vigorously as Reformation clerics debated the difference between transubstantiation and consubstantiation.

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