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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...
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- Summer '14