In the 1970s unions were s trong and able to

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: re is a reluctance to cons um e les s . In the 1970s unions were s trong and able to negotiate large, com pens atory pay deals that s erved to intens ify inflationary pres s ure. In 2005, that avenue is pretty m uch clos ed off, but the abolition of all the controls on credit that exis ted in the 1970s m eans that hous eholds are invited to borrow m ore rather than cons um e les s . The knock-on effects of higher oil prices are thus felt in different ways - through high levels of indebtednes s , in inflated as s et prices , and in balance of paym ents deficits . There are thos e who point out, rightly, that m odern indus trial capitalis m has proved m ightily res ilient thes e pas t 250 years , and that a s ign of the enduring s trength of the s ys tem has been the way it apparently s hrugged off everything - a s tock m arket cras h, 9/11, ris ing oil prices - that have been thrown at it in the half decade s ince the m illennium . Even s o, there are at leas t three reas ons for concern. Firs t, we have been here before. In term s of political econom y, the firs t e...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online