UK

British Empire (Colonial Era)

From the 1750s to the 1930s, the UK had a long history of trade through the Empire. This trade was based on controlling the trading partners (often called the Dependency Model).
The British Empire's dependency model refers to the system where colonies and territories were governed by the British Crown, often relying on the economic and political structures established by Britain. This model facilitated the extraction of resources and wealth from these regions, while maintaining British control and influence over their governance and economies.

From 1945 onwards, the global economic system changes in the postwar years with the USA centric IGOs — the WTO, IMF, and World Bank — leading a type of capitalism called ‘free market capitalism’ based on market liberalisation. The UK is one of the founding members.
Whilst there is no true free-market, the economic system aims to see prices for goods and services determined by supply and demand without government intervention. In practice this system happens with some government intervention as feasible to avoid the collapse of central revenue, and as such, services. It emphasises private ownership and the freedom of individuals to make economic decisions, aiming for efficient resource allocation, rather than top-down decisions.

In 1972, the UK government voted to join the European single market (also known as the European common/internal market), officially joining in 1973, as the Empire had faded.
Free trade blocs like the EU allows frictionless trade between members. They aim to reduce or eliminate trade barriers, such as tariffs and quotas, among member countries to facilitate easier and more cost-effective trade. They promote economic cooperation, enhance competitiveness, and can lead to increased foreign investment and economic growth within the bloc.
The EU also employs protectionist measures to support its internal market. This includes tariffs, quotas, and regulations that can disadvantage non-EU imports. It still actively engages in negotiating trade agreements to promote fair and open trade globally, but implements regulations and standards that may affect how non-member countries can access its market. Within the EU, there is a customs union that applies a common external tariff on goods entering the market. This means that goods from outside the EU may face higher costs compared to those produced within member states. The single market allows for the free movement of goods, services, capital, and people among EU countries, which can create competitive advantages for EU businesses over foreign competitors.

In 1976, the UK had an IMF bailout (paid back by 1979), which came with the conditions of government cuts and market liberalisation.
This bailout came as a result of the 1972 budget (also known as the dash for growth budget) delivered by Anthony Barber, the Chancellor of the Exchequer. The budget is remembered for its large tax cuts, and led to high inflation and demands for higher wages, as well as the 1976 sterling crisis when the UK government was forced to ask the IMF for financial help. It also led the Conservative Party to abandon "Post-war consensus" policies.
James Callaghan's Labour government had to borrow $3.9 billion (equivalent to $21.6 billion in 2024 dollars) from the IMF, while implementing significant spending cuts, with the intention of maintaining the value of sterling. At the time this was the largest loan ever to have been requested from the IMF.

In 1979, the Conservative government, under Margaret Thatcher, accelerates these free-market principles. Following public disappointment in the Labour Government’s management of the economy through the 1978-79 Winter of Discontent, Thatcherism represented a decisive shift away from the post-war consensus that favoured Keynesian economics, a strong welfare state, nationalised industry, and close regulation of the British economy. It advocated for free-market principles, reduced government intervention, and privatisation of state-owned industries.
Under her administration, there was one major exception to Thatcherite changes: the National Health Service (NHS), which was widely popular with the British public. In 1982, Thatcher promised that the NHS was "safe in our hands".
The following decade was characterised by deregulation, privatisation of key national industries, maintaining a flexible labour market, marginalising the trade unions and centralising power from local authorities to central government.
This has largely remained government policy until the present.

Free market liberalisation is good for business as it removes rules and regulations, making it easier to trade. This allowed the growth of the city of London as the global hub of the financial sector in the 1980’s (often referred to as the Big Bang).
This also made it easier for foreign companies to invest in the UK and to buy British business. This is known as the deregulation of capital markets.

Throughout the 1980’s, the UK government encouraged foreign firms to invest in the UK, in the hope of creating jobs and a wider tax base. The government would encourage this by softening regulation and offering incentives or subsidies to companies.
Companies such as Nissan in Sunderland invested millions to build cars for both the UK and EU market. The UK government (unlike most) has been very relaxed about selling UK assets to foreign companies (such as power stations, utilities like water, football clubs, newspapers and anything else — refer to things like EDF with power stations, or the UAE’s stake in The Daily Telegraph).

Part of liberalisation is privatisation (where state companies are sold to private buyers, whether domestic or foreign), with the aim to bring increased efficiency and competition, whilst raising money for the government. Well known companies like British Gas, British Airways, British Telecom, and more recently Royal Mail in 2015, were sold to private companies. This made the ownership of these companies global.