Abstract
The ’Hoover‘ affair has reawakened interest in Europe in the British production regime as the closest to a free market regime in Europe. This paper argues that in fact the British production regime is another example of a societal-specific system in which institutions and social arrangements are central to the specific characteristics of the British system. The low-skilled, low-wage employment system, with high shares of long and part-time employment emerges out of the interaction of institutional and social arrangements, including family and distribution systems as well as the institutions of labour market and industrial organization. This interaction creates both internal coherence and internal conflicts, but adjustment to internal conflicts does not necessarily result in escape from the vicious circle. Similarly the impact of international integration is not necessarily convergence of notional models, for, as in the British case, ‘internationalization’ takes effect through institutions, sometimes resulting in increasing divergence.