iii$\ l.r'*'ir. i tI ClEl\CIASECOi'JOitilCAS Capitalism s i n c e1 9 4 5 Philip Armstrong AndrewGlyn JohnHarrison @ BLACI(WELL Orlot¿ UK & C"ñ[ti¿t USA 1 A IIIU \IIUdL Slowdown ñ r:er1Jr, . ¡-.,¡ z1r<.: ' e"l" P¿nJ ' i in rhc l¡.turcol lhc pcriodsinccthcpost$.rboo r coll'Pscd Thc outst¡ndin|¡ l his final gro$th ofproducrnrn in thc thc slowdo*¡ ,fCC. in t9l+ hast""n for an'l ihc rcrsons rnd anrlvsing withdcscribing partofthebookis conccrncd of thc g.carsb$¡lowL This ch¡ptcroudincsthc l'cts ol rhe implic¡tio¡s and slowdown craminesthc gcncmlstag¡.tionof producriliw¡nd sing oi dcwith thc phcnomcnon in luropc,togcthcr cspecially unemployment, whichpfccilirired Ir sho$srhir iun.s thcovcr.ccumul¡ri(nr industrializ¡¡irD. wis rhcpr uctof ¡ susl¡incd thcslo$down Pcriodol r¡pidgrowr¡¡nd hi8h demandior labour,so ir tooksomctcn ycrrsor so oislo{ grow¡hto rsist thc r lI s b . ! h n . {c" ] . " q r rh r L kr " , r i r r L ! r L r h c nr | | r ( r " \ L ñ ' r ' ¡ r ' F t . t h n c'n' . irll\ irr rl ' unc'rn ¡nri rl:' rcsn,,¡* ¡ iÑiirmrr \¡ih.$lln¡! \rrlIr n'n\l r\¡,,\(,1l" hr Inrh r'rrrgl\nrr'l1rúl r'clcr(rrrn >J- . manufurlurinf Ihc p.r¡tr1t)l(rjcil cl)mfcrni(Jn Nlorco!cr. ol-int.rn¡ri(,rrrl prcdicrrblc ¡rcssurcs f¡r fr uctr\cir¡crt crr lcd to ¡¡r slo\¡growthrnd rc¡luccdopportunities fragilcfinancialslsrcm Golcrnmcntsbo.roNcdmorcro mainf in increasingly to kcc¡ lning srandrnls thcir indcbtcdncss incrcxscd denand,consumcrs corfonriürs and b¡rnks¡nd industrirrl risingdcspitcragninl rcrl incomcs, ro tñ ro in ordcr lin¡nci¡lm¡nipui¡rn)nj in evernúrc sophistic.lcd engagcd gcneritCrisingprofitsfor sh¡rcholdcrs Thc basicliFrcs li)r lhc do$do$nrrc sclour irrt¡blc l1 l Ovcrthc\hr)lc pcriodsincc1973groerhin rhcAO(ishasbccnit h¡rdh morcthrr h¡lf the 'l (¡bsolurch rareof thc sirrics¡nd c¡rl! scvcntics.hc slüido$n$usgrc.lrcsr h¡(l i)licl) ccorromics Il thc inJ¡pan¡nd le¿srin rhc USA a¡d relativcl!) in 198() rhcir otlrpul prelious pcriod rhlr grownas lisr afrcri97.1¡s in lhc -lhc c\t¡r goo(lsind scniccs wouldh¡rvchccn ncxrl\40 pcr ccnt highc. ourputol thc USÁ. \n ro thc cntirc $oul.lh!\c bccnroughlycquil avaihblc ch¡PIcrs is thc subscqucnr !!cslion ol \vhohis impof¡nt iocusol rhisrnd gro$rh sk)wcr borncthc impicrof rhis ¡¡d rccorcn In ¡\o clclcsol rcccsfion Thc pcriodsinccl9?3 conr¡riscs irrrroducL(l major rolrntrics gorcrnmcnrs in rhc rcsponscto thc crash, 234 Capingwthrhe Slowdawñ Table 14.1 The growlh sLowdow¡ 1960-73 USA 96 oEc0 growlh 'ales or 1960-891av€raqe¿nnualoercenlage 1973-89 1973-75 1975 79 26 22 39 21 .'08 0 l io 5 l 39 1979-82 0 l 09 31 0a T a b l €1 4 . 2C o n r r b ! l o n st ó A C Cd e ñ a n d1 9 6 0 8 9 t960 73 r973-89 55 21 1973-75 1975-79 lg79 82 1 9 8 2€ 9 21 43 36 ;i .l:l:':;li:Í;''j:l"tli''l.i,l il:f:'fiili; ,';,''il."$:il:;l"::i]:i ;*::n"i,[i'[':i ,,1^ i::i;* r'lr. "T.'lh iüs]",,,¡!c,"d ol,"*", il: lllfl:il;il"",.,T;:il;',.i; :_,1 rhc ncr;n,n )e¿rs ;i::;.';l:' ;:" r¡,hc', li;:iili.'::'i;l ;,T"'';],'i :i'ffiifÍil"lilil:: l:"1:;:lr ru,i:i,:;illitnl;ll'^'l'; "*' j;i'l:il::i,:''"'* llil'i'1 :illi,:: :,ir;i,i'.:*lÑj::l t "' "r^'"a ,1,i 11¡, " srnrvth rrrT 27 0 1 00 05 a2 09 artloor sour.o OECDH5ro,cálS;rrr's ¿rdE'o^'ñ|' j,'i""** j'i,':;:,';i,üi,'"f ;;:il:"T:t il.f*;",r"' il'i*if +;il ?lj':::il l,¡**'p''"1e*"¿ 36 03 35 198239 00 09 07 1 2 06 00 0 l 08 06 02 -42 u ñ 6 l i n p e r c e i h s e so l 6 O P l 1 o r l [ c É ' g ú r essh o wr h ¿¿ ¡ e n r l o w h c h avé69. ¿ñnuaDet¿ñl¿geq'owtholroG oulour cove'nm¿ ¿¡peñtlturercrt6locÚfed ¿ndc¿pr¿l spénóñ9oñ 9oó¿s¿^d servces1re erclüdrnqtáisre6l n ió€ ¿DP do ¡ór.ó(6pond p meansrtur lorarqrowihmay d verse s qhrv kom suñ or comporeiG Souióé OECo. 1939 Ecanañc Aúnaar Juie bbe3l áñde¿drer'ssü¿s rhc groerh of disposablc dctcrmincs in govcrnmc¡rrransfcrpaymcnrs. in rbc m llLrctLrrtions is rhus limircd Houscholds'dircrction iDcc,mcs. propor¡ionof incomcsavcÜ|. ,llcr!vtccn1961).nd l97l rhc rrcl(rrion of hous'l)ol(li¡c¡rfrc !iv!'l in;crscrlf;onrll.2¡cr cenrr,)ll 2 fcr ccnr,¡s n!,rch¡(lm hc trr is clirt¡ r,rot1i"t rhecillilr-br inrlxrionol rhc rcrlrrluc rfiiiiiÑirgs consumption s¡vings\is rbsorhc(l h i¡crc¡scd nrlcs¡ cnr i¡ Abour half (tftftsi-iñ¡ñ;íl h o u s i n s j - l h c s i v i n s sr ¡ r h $ o b b l c d l r o m l 9 7 l l r l i l L h cc t r r l vc i g h r j c si,l i r r (;cr¡r¡nr' ln w h i c h l f c l l ' c r v s h a " h i n i l l r h c m a i o rA ( l C s c r c c f r J x p t l na ¡ d p t h e r c n t h c f ¡ l l i n l h c s . r i n g sr ¡ t i o c o n r r i b u r c rdr c u n d I ¡ c r c c n t e r ¡ c r r t t t t h c i n; F r a n c c l, t a l ya n d t h c U K t h i sr c P r c s c n l codr c - t h i s r o $ t ho f c o D s u m p t i o n i o o n c - h ¡ l f o f r h c ¡ ¡ p i d r i s c i n c o n s u m p t i ounh i c h u ¡ s r n i m p o r l . n rl ¡ x t u r c o l ' ¡ h c r c c o l c n . I l o u s c b u i l d i n gr l s o c \ p a n d c ds h . r p l ! r ¡ l ( ) 8 7 a n ( l l 9 8 i l ¡ l l t ¡ d c c l i n i n gb c t w c c n1 9 7 3¡ n d t h c m i d - 1 9 ¡ t O s s v i n c r c ¡ s i n gl h c n o f r h c i rr e ¡ l i n c o r r r ' b C o n s u m c r rsc a c l c dt o t h c s ¡ a g n i r i o n ¡ n d n c u l v l i b c r a t c db t b o r r o w i n gf r o m ñ n a n c i a l i n s r i t u t i o nl l su s h c d\ L i I hc a s h r o s ' h r n r h ( m r dl l n h J ( l ' r c rc ' l c n J 6 n ¿ n , , ¡ál c r c s u l ¡ r i ' n ' h l , sh t l r c d r c i r 'LLhr(t^\(1 r' I J c d ' n r ( , n ¿ l " ' " l q 8 0 ' , n ¿ p 1 , ." ¡ r n . g É q i d f ñ í f . ' \ ' u n c r I n c \ h " l c rirr'. 0u1'¡rcl r ' r r ' d ' l c I l t n J r r{ ' o c c u r r c d¡ t b\ drc Srowthol paxivc, conslriincd householdclpcnditurc h¡s bctrñ"reiatnch "I;,jur;:L^"r'l{if,li':li.ill;"':"i:i}1i!ti:liii',ll .l;1.,,:::H*,,::i,"]:lT:,h llo:iii",."''J,,:",,,"¡:,,.j, :i I::i::l "rv "".^" i",. r. l,¡,"i,.,. I "'il"l'Í;l'l"ii.l l|'1.,1 ti"l,l.i' r , ,r h t r , * d n w nt r ¿ h l lc+ l ) .onrrihurcJ CorsL-',s lo b ¿Te -.*-*tt" ' --H#i# "#u:i:"J::l, ;:lj:Tlxil'r, "t{:üi;li:i :i:{: l;1 ;l':in' t ^';l"l:'I:;:i .:i*,1 ;i* ;:r*1:':Íltl'+ll iili ;,Hl] iili'liTHf inll[i;:-n*t::T,L?l'iJ]i,,lll' -,'te< t( - r€serl¡, I r\¿rr.\C - l¡¡€l(\> L1t\ !h, - .7,b"ec,l | |ei¡tct/ a ntA 2 l i ¡ l l r ) / t ¡ ( ¡d 1 r / li l r ' 5 r r * f u w n . . . O rf o r e i g ñ e r s . implicd by thc ¡!o risls ir Thc fcducrionin purchasingposer Nhh¡n the ACCS gro$rh' Bur suchd;rcd cffclc "ii pri.* l''", ¡""" " A*"rcc1 scapcgortfor slov d c r c n ' Ú r r i o ni n r h c , r:.oo",o¿ n nr:(c i1'rc¡sc: (rn bc c\rBgcr¡r"d Thc n J u ' e d ' p c n d r n gp o \ c r i n i l " c A C C ' . 1 " \á l i r l c ,,,.. ^' 'r'¿" *¡*r'."'hcd q ? J ¿ n J l o ? 5 ¿ r J b \ i h a u r h a l f a ' m t r 'h i , r ' , 1 , " i " . , ' . , l r " " ' , " r r b rn re c n I bv ¡J "",,r'rcrr z.r'n{,.' hi(cffL. sas'"hsrrnt'rrr"rlscr ;.';;i;;;-8i. r n ' r c rscd r . u n r ' + ; ; : ' ; : " " . ' . ' . ; " , h ' r c .r i c n ' " r \ i s h c r ' ' i¡lr i c r 'úh rcL'nuc\ro rf' l('\ !ru\rrrpco rh,i¡ oun¡.. from rl'( \CC' t'tr lcnr ( ( c ' h r l r c r 1 ñ i { Í c r l i l 8 2r h cA C C ' , " " ' u i . , r l O C , ;" L ' ¿ i J l i l c $ i ' c hur 'ul'\rrrrrirllv Ihc \cncñ(i¡l (ficcr rhr' hadnn ,r"1" '.n."¡ ,.'.'.' 'iil lnd h\ . ;."i."" "',""' . ': .'', ' rh( dc'lincin ncrc\norrrs rhc fr'rdu(c" on '1rr\rrcrrr\ In l'rcr 'd cur {crc rltr' LDL' """i.,1",it ¡'" n( ,rrlvinJchr(d t"i' thu. srrilc rhr c"r or imrors inro Ihc.{cc\' ¡nd ;;;;;';*; rolc in th' sllcrnilrñnñ' oosshrlir.c' 'f cr¡"rri¡g, nlD(d I \(N impnrr¿nr in rhdring :..'f'" '.., *l *, .i- '¿\ cr,¡' .r,r.( l'rtl. rhc!$ crcnorimncn^nr (hc patrcrnof dcmandolcr rhc pcriodas ' wholc . . Or governments? go'Js rnJ \Lnj'c' .r"l( 5tcndingon_ ln rrc tar,U,"nd c.rrlyIai0, iI.rc:.*d (tJnrcra ¿r' nurput ol (cnr grns-h pcr \cd! ior nc¡rryJ I nür iro'rd, J m¿¡kcrs \¡s \p(nd'ng d b) n7J g'ñ$th Dro\rd{ 8o\crnmcnr rhcd.rccrimlcru\ñu irrcr I h c ¡rm l g ñ r l 7 ' c u r r c n ' c i \ i l s P c n d r n c h r ¡ r ' ' n h\ r l f . 1 . \ r ¡ " n g {'drrcus"cd slr¡vl-v'.rnd nrorc h¡s prosrimnrcs {cllrrc 8(^\¡ ¡nd odrcrmci¡l .¡lLic,,rion hrlc .,t* ."pal n."g.".."t, suclrdsll)us'buil'linlalnd ro¡d co¡slruction' shrrDlYcu( back,r bccn 'l'.,,. :'\ r" r 'luri ir "r 4 pcI r,"j-.* ",,'..i'. rr I ' rc in rhqrrrl' ''!un rhcJ\'rJsr dcricnhx flu'rurruJtrclilllvin lrr?5Si1 f 'h(rr'l'hc -"","icülii. slo$ gro\!¡hof oüFul ¡nd thcrcl¡rc rcal ,f'" ,nnn"Z-+ n". ." " ,,1G I)lJ r . r r " i n r i r r . ' r n u c " L ' n l h ( " l h 'I ' i d f " f L h f: \ L ( r ' u n t ,".-".'¡.t.t..¡ r'(ncnt'\hij( Irrrcr numl'(A ,1" '. ,'"."i"1;'..""' i rcluJr.r rhf c"\r "r 'rtr' ri\ing . i ' , J . ' , " " , ' . " l i * ¡ ' . r , , rh ' n ,h r ' h c l t c l r " l L ( c ' h ( ' h ' r ( ' I r n ' i l r ' rrrc' f ' r r n J h i F r \ | i r r " i ¡ . ' , i ¡ . ¡ '¡,u¡ ' ¡ ¡ n / ' \ l " r ( ^ c r " h . u m r r l r r ( ll { f inr"rcslprym"nlson lhc nilir)'r¡ldcbl intrc¡s",1 u 'lt¡ i'.,'. ¡ cn "(n m'r' J(nrr*('l 'rrr'( l'¡71.hiJ 1'n,.' -.t¿, r r ' lr ' ¡ l ( ' \ L r ; . ' . " ' t . " ' . " " ' ¡ J nú f r h r ' ¡ I h l \ l l u r i q ' ' l f i . l l q 7 ¡ go\crnnrcnl rn incrcrscs dclibcr¡rc irtcn¡ in l9?8,rh¡t thcrc$crc suhst¡nrirl ' r t r u ' g l ' r ^ ' l h ' . r r h ¡"I n¡J,li"' (mrn'l . ' " . . : , ' " " ' . r r . , : r ' , i r r i nJ F r ' \ ' t r + t n r \f ' r r c r ( s \ t F n ( r l i l t r ' f ' l h ú r r h r ' ' n . \ t . r 1 . i . r , r ,r l t ( L i \ I l7l {sc' c\rtr' rr rn } c.r,.. .rl' 'n G, rm'n' Jr,l J \ ' s ' t t J r n r r r\ 0 t n . u m . ¡ " ¿ c ' . t c r ' ' r , ",,' rf s r ¡ ¡ s ' t J n l " n r - i h ' r ! ! i 'rr go¡crnmen( inirrcuscs dclibcrrtf 1979 :\frcr rhc slosdosnof ¡rkcrs sa/. o{!?d - ce-'rrg€n c x p c n d i t u r rcn d i n s t r t c r l c l i c i r sp 1 ¡ v c ¿l i r l c r o l c i n h a l r i n st h c n a s n i r i , ú l h ! l i m i ¡ . t i ¡ r r so { s ! . h K c y n e s i ¡ nr ( , l i c i c si r r h c 1 ; r . .( l l i r n ¡ i ¡ ¡ e f r ¡ l $ c i ] ' | r c r \ ( si f 'hc g¡,qrl 'l=¿.u' r¡rr*s'r' É¡r¡hi!rl\ r(\(.,lfJ.,",1 .. .'¡,t'i,'.rñiif,i t h c s cp o l i c i c sw c r ca b a n d o n c dI .t i s m t h c m o r cf u n d i m c n t apl r o b l c m sr h a t] | c g.'qrf- Siio'da9 \\ot rnvcsrmenr - ¿r''(ó tI"'\a 4 ! t c r 1 9 7 3 t h c g r o \ { h o i b u s i n c s s6 \ c d i n l c r n l c n t d i r c c ¡ l yc o n r r i b u t c dt h c e q u i v a l c not f 0 . 4 p c r c c n t o f G l ) P r y c r r t o t h c g r o . r r ho f o v c r ¡ l ls p c n d i n gl,c s s r h ¡ n o n c h a l f o f t h c i m p c r u si I c r c n c d i n r h cs i x t i c s( r a b l c1 4 . 2 ) . ' l ' ¡ cc o l l ¡ p s ci n thc invcsrmcntratc w¡s concc¡tr¡tcrl in 1974-5 (chnptcr 13), with ¡r Íirrthcr s h a r pr u n d o w n o f s ( o c k si n 1 9 8 { l - 2 .l l u t c l c n i n t h c r c c o v c r yt c r i o d s r h c g r o w ¡ ho t f i x c d i n l c s r m c nst a s h c l o wr h a to f t h c s i x t i c sli¡ r c x r m p l c ,i n t h c l o n g cxpansion r f t c r 1 9 8 2 ,w h c n t h c r c s a s m u c h t ¡ l h o f a n i n r c s t m c n bt o o n , t h c coniribution of invcshcnr r() cxpanding dcm¡nd wl¡s distinctly lNcr lhirn during rhc ¡!cragc of rcccssionsand rccovcricsin rhc sixrici.l ilhc st.rgnrtion of inlcrmcnt nor onl] inhibitcd m¡rkct grolv¡h, it ¡rlso ' u n , l ( m , , ¡ ( J . . r l ' L r " f 1 1 , m , u h r i , n . . , n . 1r h , ' , l - r r , " r l , )41+ n r o t l u . r n r D , r r n l i . r l . . \ \ h i l co n r \ ( , r r o l l l , r rr n \ ( \ l r ¡ c n r . . , 1 \ c sn , n ) r { L l l , r l r ¡i..u¡ in il''" ¡r,:,,ilL,l,ri,n ¡'á....--Íñ"1. ',r n /, ,'r'i'sl d¡$, 1 inrcstmcnt lossof moncnmm.A srrgnant lcrcl ol bringsabouta significant r n \ c s r m crnJrd . h - s c a . h) c r r r , ' r h cc . r n r r\l r n r Lr S i ¡ r . ( ' h c . r i ' . r1s . r i ' grosing.in cJrhsu(cccding )crr m,,( ofrh" in'c,rn¡fn'i. nccd,.lrmoh r"4rcphccrhfl hrs bccnscrrppcil. s.\r i ¡!hc dcc¡dc¡ftcr 1973,rhcrcfitre, subs¡¿nridldcclnrc nrrhcr.rc ol ¡ccnn)ul¡tn)n.'l hc sro$rhhrc of rhcbosin.ss capital stochnlcrrgcd5.3pcrccntpcrJcrrbcnlccnI9ó5a¡d 1973.Llvl9lJ3il hadfillcn n) 3.2pcr ccDrpcr)c r.) .y'flJust as thc.rccunrul.ri{,n r¡te t¡Lcs¡ rvhilcto s,rl,si(lc, r rccolcrvin ' inicsrmcnr rakcs:r longtiñc ro lcvcrup rhcg(^rth ol t|e crpir¡lsrock. As \f (f inlcsrnrcnl rf¡cr1982di{lnorrc¡chthcincre¡sc ir havcsccn,thccrp,¡nsi,)n thcgoltlcnrgc. Il," l'./89thr rarcol gro$1h ofthc cipit.rl$r)!k rvc¡rgc(l4ó pcrccn¡rnd $rs srilllltlol thcpcakrarcof5.6pcrccntrc.rchcd in l9?0.I lcrc, howclcr,rhcrc\vcrcvcryimpo inl difl¡rcnccs hd$cc¡ rhcnn¡)! l)l,,uks, ¡r(l (figurcs 1t.l ¡rd 1'12 i¡(l bcrwccn mrrrr¡f¡cruriDg ür(lrhcrcsl¡)lrhcccononry hblc i.1.3)J ritc ovcrthcrlr,ic pLriodl97l-il9 In thc USA rhcb!\i¡rc\srccrnrrlali(D vas rcry simihrIo rh¡{ ol (hc l9l st thc r¡rc ¡t rhc e|r(lol r¡c 198(ls $rs hul thccrrcnrol rhc.sc¡kcnina of Clb somosh.rhclosrhtnof rhccirlr sctcntics rcrunn¡l¡ri(nr $.s rcliri\ch slighr.In.hp¡¡r(hcrcco¡Nl¡'i(r)r¡'c {litr.(l sc\efcl\ .ftcr 1973,indcc¡l¡s ¡lrc¡dl .listu$c{l(chrprcr I l) rhc\ frrkcni¡g ol.lip,rncsc $irh rhconsr:r ol orenccuntLrl.ttio¡. lir accumulation bcganin thcc¡rl\ 1970s rrtc\\rs\ Lllbcl()\1 h¡ll ol rhrtc¡l frlc rr thcbcgiIning 1983thc¡rcc¡n¡¡1¡rion , . t.l^,. - u ' t¿ a ' e t k t t Table 14,3 The ¿cchurarioñ r¿re 1960-89 l¿ler¿geoóóu¿ r.r.€nraoe arowlr r¿resoi l o p r ¿ r ' r o LI r960-73 r973-39 r973 r933 r939 r 9 6 07 3 i 9 7 3 A 9 51 2 Figlr€ 14.1 ACC manlt¿ctunng accumllálLon,1973-89 lgrowlh ¡ales, beMoen $e b e g ' n .n g a n de ¡ d o r l h e y e a r o j g r o s s r x e d c a p ' l as t o c k .p e r c e n l a gceh a . g e r of thc 1970s.SubscqucDrlv, hosevcr,thcrch¡s bccn¡norhcrph.ronl0nrl in!csrnrcri¡ b(¡rD iD Jrprn, lc!cringrhc ,rccL| )ul¡tir,rr¡ro bxckne¡rlyinro doublcfigurcs.By 1989 thc büsincsscapitalstockin J¡pan lv¡s nlovingup to{rrds its 1973growth.Judgedby thh crucialindicaror¡r leasr¡hc crisisol ¡ccumuladon secmsto havebeensubsta¡¡irlly su¡mou¡rcdinJáp¡nby ihe rnd of rhc 19805. In luropc rheuory is ratherdific.cnrtr¡r^pe. rlcumul,,r,,n ratewas the eeakestofihc thrce blocswith capiralsrockgrosth dcclining steadilyfrom the peakrateof57z per centin 1970ro 27, pcr centin lhe mid'boom'hadonlypushcdit backup ro 1980s. By 1989tbc invcstmcnt 3% pcr Cn importantgencrd fe¡turc of the patterno[ accuñul¡rionhasbccn rhc muchweakercapit¡lstockgrowrhin manufaciuring lhxn in to¡rl busincss. In botbEuropcandJáp¡nthe accumulation ratein manuficruring ¡ftcr 1973has ¡verágedunder b.lf the prc-1971ra¡c.I¡ ¡hc USA1!l:;¡ccumülarion r¿rcin manufacturing in 1989washalfthc prc-1973rrre lDJ.rp3nthc rccoycrlin manuficruring rccJmul¡rion hasbccn¿ lit lc scrl¡r'h¡n in bu.inc\r,.rlrh.,uBl ihis has still lcft thc c¡pit¡l stockgro$ingaro!¡ndrhrcc rimcs.s far as in luropc andrwiccas fastas in rhc USA. Bcforc1973rhc ¡ccunrul,rionr c l]) manufacturing ]|as similárto or grcarcrrhrn rhc rccumlrlation r¡tc clscwhcrci after1973i¡ $is slowcrandusüallyr lot slowcr.Thc relarivchck ofdin.mis'ü in manufacturing,the ñost importanrcomponcnrof intcrn¡rionnlrracle, espccirllybct*ccn thc ACCS, hás bccn a major fcatu.c ol rhc vcars oi slagnation; thc rcasonsfor andimplications oirhis will bc ¡ ¡ccuften¡rhcm. in this6nalsection ofthebook.Oncstriking resühis thattheupswing oi thcI¡rcr lq80rbroughr ürilizrtion crpaciry in mrnufrcrunng nficrnrllrl-r.I in I S¡q n irspeahlevclof 1973-1;in the mrjor Europe¡ncco¡omies it ¡rasrctuallv .', ráther u ¡ c r¡highcr. ,g¡cr. (r.. The maior rlackcning in thc ratc of¡ccumul¡don irnd subscqr¡cnttiilurc ¡ó F i g ú r €1 4 . 2 A C Cb u s i n e sasc c u ñ L r l a t o 1n 9 7 3 - E 9 l g r o w l€ht e s b e l w e e ñt h e Ó e q n n r ñ g ¿ n de n do l r h ev e ¿ r o ' g r o s sl i x e d . a p i a s l o c k .p e r c e n l ¿ gder a n g e r regainrhe growthotcapitalachieledin thc sirtiesis ccntr¡lro rhc stign¡tion rftcr 1973,cspcciallv in Europe.lt is to ¡hekeymanifcstionsofthis st¡gnrrion lhatrvcnowturn,bcforccxamining thc rcasons for rhcNerkncss ol inrcstmcnt S.rr rr.o.)n4 -11€ld ( | v...<r'(, T a b l e1 4 . 5P r . d r c ! , vr y . 1 9 6 0 8 a { ¿ v e ¡ ¿ ! ¡ ¡r ¡ ú ¿ i J r e r . c . r ¿ ! e ! r o w l r rr a l c s l St¡gnario¡ of pro(lu.tivity ¡nd rising oncmplovmenr grc{¡h of output must bc rcflcctcd rn I lÁs a ma¡ler of iccoun(ing, a slo{cr ' l ucr g_"trh ñr prndu(ri\in nr snmc .lo\vcr crsrl' ñl .np'n)mcnr' r g r ' " r l o l r m t l n ' m n r m ' r \ r' n p r ) n n n g .,,-¡",.i,o" ¡ he ^tu { lñ'' r¡bour rorcc dccrinci in pararrcl A oi rhe "''i"'. thc s,o$th :;:;;l;;;,";i grnqing I'i1 ' 'n"'i rr'l nn\lJr(J inrñnr{( J"$lv a.',.1 "."-t¡ ",."""" ^¡ rhcrrh( m¡- "i r\' i'i"" ':,"J"'¿. ,'J , ' p.''iu 'cni.^ 'rnc s¡v ¿n ;;' r"".ii süncrJ', r'ur(' r'r"" cr grorrh ri'r,c*er'-s'i¿' ;i],'t;;;" Jrrñrcnrrorm' j.""' ,il -'",',i;' ."'ri, . rh,r,,' ¡ ,,rdc-nr'b,acc¡hc'c is m¡int¡incd¡hcmorc "i ¿",*;.ti i.* n"¡*"*ncc. Thc bcncrcmplovmcn¡ mr p¿J f'r rak(-h' "'J".," ^ i'""* ¡ 'urr(r(.$trhfr 'h¡\r¡rnn\'qú'ncc\ i l ¡ . . ¡ " * " i i ¡ " { , t r , r .t c ^ x ( . . , r cr ¡ , n r ¿ i n ( dI '.r ¿ s i t t n ' l { , r ñ w n' n p'r' Firstwc t¡kc-homc ¡* ¡l-" ¡'" bruntis rakcnbv rvorkcrs' "..¿"1,1"1,u, t¡p hecn divided :;;;t;; ;h; "",""' to which a slorcr growth of ouqrur h¡s 4 ! b c ¡ * e c ¡ c m p l o v m c nar n d t r o ¿ u c t i l i N f t ¡ b l c 1 4 8 9 l a v ' D r a ga€' n ! a p e r c e n l a g e T a b L e1 4 4 O u l F ü l r r r ! ¡ ú . l v r ! a ' r l € ñ t r o v ñ € ' l l 9 6 0 OECD r 9 6 07 ¡ r9t3 89 1960.13 r9r3 09 2 2 2 5 4 3 1 8 2a r96073 r9738! 26 06 t 5 t 9 2A 96 39 a1 82 30 -42 l 3 09 48 2l 2 1 31 1 6 -21 l l 00 Soú¡.e OECO.rr¡óli,t rii¡rr,.. Ecar'nr' O¡ta'k r' J \h"lc dll l hc n,o.rLrli¡,t¡ l('r, r ni ''rl-l!14¿ i' rhrr'f"r lhc A( :(:' in I Ju(linu tr{"lr(rr\ir} ,1" '1""j."" '" ',jip', grourhhrs l'ccnr"llutr'J ir \rmc rr'( s hci"rc lcTl rhc ar c'n'nucd ha' gnrrh l-.r1,''-""i nr*'1. rnr i;;i,;,",;i ;;';,\ .i.".a n"',r'¡ ,nr¡rJn.hu'nnr'r '' rrin r u'n¡c $irh rhc .'.'""Llt *..f*"'"¡ ";;;;"";;;i;," '',-"11,,","i: I h r r l ' i n l h c U S A H n q r h r sc ¿ n h e ¡ ' i o n r i l L d 'rhc hu'"nc ""..Drnvmc.ic,hc' "n¡ ñrrhrnc\rsccrinn sri'wr\' " c' 'm"' rl'cn '"i\t 'l tsc Nl irrnr'\ruLri\rn Thc productivitYc¡isis gro"th rftcr 1973 (tabb \All thc blocs achicvedmuch slosc' productili! wherc \+.si. rr'" -" cxceptionis rhe rnznul¡cturinsscciorof rhc USA' 1960 73 1979 B7 4 2 2 2 t 9 1960 73 1973 79 r979 87 5 l 3 2 39 25 06 32 t 2 ¡Il l 5 1 7 a9 s6 38 r 05 p r o d u c t i v i ¡r c b o u n d c d¡ l i c r 1 9 7 9 .I l u r ¡ s L r h s t x n r itr¡lr r o l d r c r r p n i g r i ^ l r h t h c r cr c p r c s c n r c dt h c c x p a n s i o n o f t h c c l c c ¡ r o n i c isn ¿ u s t t ( a s t h c o u t | u r o l c o m p u t i n gp o \ c r r o s c c n o n n o u n y ) ,r r h i l c i n m a n r o r h c r n r ¡ ¡ u l ¡ c r u r i n g r n d r s r r t .q u rc h r ! r \ n r s r n f n , r n Jr J i , . n r l l l r n nr t , . r r 'l i , , l , . l n , , . r , . ' r e s u l t s( s c c c h . f t c r l 5 ) 1 l h c d c c l i n ci n p r o d u c t i v i t g y rosih w¡s parricul¡rly h r s c i n J i p ¡ n ( 5 - 6 p c r c c n r ¡ c r v c a r s l o r v d o r n i n b o r h b u s i n c s s¡ n d ¡ n i n u f i c r u r i ¡ g )i ¡ ! l r . ¡ h c r l c s sc l s c $ ¡ c r c( ¡ b o r r 2 t c r c c n rp ú ¡ , g r ri n l i r r o ¡ c ¡nd US busincss).{-hc usualpancrn was fir prrxlLrcrlvir_a gr^vth ro slo$ .lo\i a sm u c h i s , ¡ n d u s u . 1 1r). r h c r ñ o r c ¡ h ¡ n ,r h c r l r c o f g r o $ r ho f H x c dc ¡ f i r r l p c r * o r k e r ( s c c h g u r c l a . 3 ) n S ow h i l c r h c s e n c r ¡ l f i c r d r b c ¡ i n d r h c p ( x l u c r i l i n s l o w d o w nw i s t h c d c c l i i r ci n a c c u m u l x ¡ i o ne,l c n r h c i n v c s r m c nrth ¡ r d i d l 1 l k r p l . c cv i c l d c ds n a l l c rp r o d u c t i l i t vg ¡ i n s . l h i s$ a s d c s p i r es c l c r cm t i o n ¡ l i z x r i o n u n d c rt h c p r c s s u r co f r i s i n Fu n c n r p b y m l r n\ !r¡ i c h . r l l l i c r c d r h c r ¡ ¡ d i r i ( n r ¡hl c ¡ r \ \ . n J u . r ' i f 'r . n , ' \ r , ' t r h ( r . l \ . t r c , l. " , r r ' i ' . t l h c c r c c r s o l p ¡ ) d u c t i v i t )s l o { d o $ ¡ l , a v cb c c n r c l r ¿ h ) v c¡ l l i n , r d r ¡ s r i c s l o s } ( l o einn r h c g r ó s t h o f l i v i n gs h n d r r i l sl i n a n c c rol u r o l c r r D i n g sJ f o ms . r t a n di ' r r h c g r o s t h o f s o c i a l c x p c n d i r u r Ic:.i g u r cl 4 . . 1 s h o \ vrsh ¡ r $ o r k Ú s ' l i l i n K s t a n d ¡ r d s h a l c b c cgnr o * i n g b y o n l y a r o u n dI p c r c c n r p c r l c i r s i n c c l 9 7 l i r h i 5 i s ¡ r u c c ! c n o i J i p a n s h c r c p r o d u c t i l i r ]g r o w r hh ¡ s c o n r i n u c d¡ r ¡i r c q ) c c t i b l c m t c ( i n c o n r p i r r i s osni t h l o n g - r ü ng r o w r h i n r h c A C C S i f n o t \ i r h l l p l ' s g o l d c na g cp c r l ¡ r m a n c c ) ¡ T h cg r o w r ho f s o c i a lc r p c n r l i r r r c( h c r l t h ,c d u c ¡ r i o ¡ , p c n s i o n sc t c . ) ¡ l s o d c c l l h e da i t c r 1 9 7 3 ¡ n d o v c r t h c w h o l c p c . i o d s o c i i l e x p c n d n u t cr c c o r d c d l e s s t h a n h á i f i t s p r c v i o u sg r ^ v r h i s i n c e 1 9 8 0 r h c growth ratc has bccn litdc morc thrn onc-rhi.d th.t ol thc goldcn ¡gc. pne imponant issuc in rcspcct oi the productivity slovdorvn is shcrhcr capibl goods production was equally rffectcd. In ficr drc price of invcstnrcnt g o o d si n t h c O I C D a p p e a r st o h a v cr i s c nn c a . l t I p c r c c n r m o r c s i o q l v r h r n consumcrgoodsaftcr 1973 (rs comp¿rcdro 7, pcr cenr nore quickll, bdwccn t] ,,,','" ,rl\ l r r , l r¡ , ! l | , 7 1 ) J¡ 1 , , ,, , r r r r \ r \r l , . ' r 1 , , . , r ¡, ' l , , , 1 r ¡ "(1r ,r r ' , , r , , 1 $r , , l , r ¡ , 1 , , r . , fl , i \ , l , ' f ¡ l i ' r r r r r r r . , , , , r . , ¡ , r, ,r lr l I t , t ) r ¡ l ü " ' l ' * \ r , ú \ l l ' 1 ' l , r ' , , ¡ , r , i l " , r er, ,l ,r l ' , { r " ( , \ , , 1I , r, ,I II r | ' ||| I\ , \ , , ¡ , i r , ( i 1 , ,i \' r l , , LL ' \ r, ' l l ' L rr l F x ¡ l s r l i r i \ { r , , r l ¡ \ , r h r . , , 1l h \ , r r r | 1 rt1r ¡ 1 r t r . ( l\ i r l i r l ¡ , , i ,r r , r ll i t l l u L 1 , 1 t r r k ¡ , r ' , v s i , , r l , , , , , , r 1 ) r. rr t ) , r r,li r i , ,( \ ( r l ! 1 ¡ i \ ) ..\ 'lhr ris¡ i,y'r,rr¡rrl,rnrcnr) .- t\ {l \--____.' (,f i J h c r i s c ¡ r u n c n r t l o ! n r c nhr s c c r l t | i r r hb c c nr h c r ) r 1 ) vs i¡r i l ) l c! x p r c s s i l ) n r h c s l a g n a ¡ i i )o¡ f) o u r N t ( i i B u r c1 4 . 5 ) .^ n d \ c l , ¡ s d c s c r i h c (rlr h ( ^ c ,r h c r c h ¡ s f o l bccn ¡nr lrll ofl in thc gulrh r)f cnrpli'\mc'9 \vhcrc thc¡ hr\c the 'l u n c m p l o \ c ds p r u n gf r r n r i ' l h c c s s c n r i ¡fl i c l s ¡ r c p r c s c ¡ r c di r i h l c 1 4 . 6 Eu'ope Eurooe JáP¿^ llSA r 9 7 9 - 3 7 1 9 6 0 - 7 3i 9 7 9 3 7 r 9 6 0 7 l pe'cenláqe gfowlh M a n u l 3 c l u r n gp r o d Ú c t li v r960-87 laveGge an.lal u5¡ r q 6 o7 l Figúre l4 3 P@dudvv ff Figu¡e l4 5 !nen]r,loymenl¡ates. 1970 88 lpercent¿se) Sru¡óéOECDEco'óñ,.Ourrodr Eu'ope Eutope LISA USA 1 9 6 s - 7 3 r 9 7 3 3 6 1 9 6 57 3 1 9 7 33 6 ( ¿ v e r a gae" ! a l p e r c e ñ l a g ee r o w l ¡ G r e s r F i o u r e l 4 4 P r o d u cvl r l Ya n dw e f ¿ r e 1 9 6 5 - 8 6 1es1)socia ncome lseeGrv' olr orearned ii',"',]-"i." ". *"n"i '.o¡súmprioñ or perhead orrhepopurálion 's expressed t erc r¡ansre¡s iii""i.iilrJ i.i;i;.;t"";"n. i"",'):t :::"'.^"' Gvñ resl P'oré'¡on: oEcD.ieBB.rhe¡u' o¡eorsoc'ar arso rs thc {Thcjlisins irrk in rhc cr¡rnrrv.n r,{ 'hc í.c In uncnr¡1"¡mcnt wrll bcklur rfrhc.unrii ofl¿búu¡.E\€n¡ can.unrgrowrh,'l(mplntmcnr fiircr.'Ihisis cr¡1crh implv.riscin onc'nplo!mcnr ifrhc hbourforcccxp¡nds shcrc whárh¡rshrppcncd in thc ACCr l¡ltcr irs¡ wholcsincc197i.Lt¡ropc, practicallv hasbcenconccntr¡tcd, nlifjcs all thcriscin OECD unemplormcnr of a fastcrgrowthofpopul¡tion of $¡rking thispattern. Thcr€a combinrtion age and a slorvcrdecreasein thc proportionof ¡hc populadon\ho are rcgistcrcd ¡s in rhc labourforcc(hc'participationrare')combincdto sccurc¡l doublingof the growthratc of thc labourforce.Such a changcwolld havc 244 Ca1tng\^/ttll tt¡c Slowdown {avet¿geannlar force and !nempovm€nr r960-89 fable 14.6 Emplovñenl. labolr percenlagegrowlh rares) OECD r960-73 r97389 r960.l3 1 9 7 38 9 1 9 6 07 3 r97389 t960 73 '89 1973 r96073' r97389 'dri" ,".-' 1",,)',. 1 9 2A 00 07 09 o2 03 -01 02 08 00 13 09 0 l 1 3 03 20 20 00 00 00 00 09 -08 0 l 06 1 2 1 0 o0 01 1 1 00 1.2 l 0 -Q.2 -o.2 03 05 10 1 3 0.3 00 02 a? basgrown 2pcrccnrpcrycarmorcslowly thanscruiccs cmploymcn¡ ir bo¡hrhc USA ¡nd Jap¡nsi'rcc 197J.tlcrc, howcver,rvelirus on thc crsc ol I,)unrpc, \|herethc cxtcnrofthh dc-industrializa¡ion h¡s bccncvcnmorcrclcrc ind (¡s rable14.7sholvs)hasbcenassociatcd with añ ovc¡alldcclinc¡r thc numbcrol' jñbs. indusrri¿l T a b l €1 4 . 7O E C D - E ú i o p se é. c t o f a l o l r p ! ip, r o d u cvl ' r yá n de ñ p o f ¡ e n r 1 9 6 0 , 8 7 1 a v e r 6 g e annuarperce.l¿9eg¡owrh.atesl 1960,73 'ülll¡ili'ffi r;:;i[Ífi $ill¡*iii,l'".i;,15i Tl"lffiIil,ill;:tjilil*;l rl),1*rl ;iii l:,:,'i;"r:,i: I tl; 00 -38 -20 5 l 1 3 27 2 1 4a 28 ¡3 25 08 l 9 -t 3 -20 2a -24 1 2 r 3 a2 1 a I B -42 a2 GDP s.. "r E'¡"n" oi'lóor 1973-87 30 06 2A sou¡.é 0ECDBFr.rcalS¡ársr.sr960 a7 .A slo\vcrgn^Íh ol indusrriilcntlo\'mcnrrhnnot scniccsrvrsrlrerttr'¡ q.,, J rcrlccr,.n,'r rtr. r.rscr gr,r,rti,,r ,,r r'rr BolJcnrs(. lhfn fe¿rurc lh¡n in scniccs,f¡r rhc vohlnrc ol ourpurof rhc rwo Produc¡i\i\in induslry sccrors $as gro\\'ingrr thc samcspccd.I hc shrrcol industri¡lcnrpl('Imcnrin lolal cmplolnrcntstill grc$ slighrl!,becauscoi ¡hc \cn tni rundo$n ol cmploymcnlin agriculturc(á producrof both slow ourpurgroNrh¡nd r¡r'id produc¡iviqgrowth).J Afrcr 1973thc situarir)n changcdin imporrantwa\s.t:i.st, rhc rurdo$n in agricultural cnploymcnlc¡scd ro abourhrlf rhc goldcnigc mrc. Whcn job mrrlctsslnckcncd, thc rarcat whichl¡bour$rs dr¡$Dout ot ftc3)unlnsidc slowcddolvn(sccchaptcrll). I,rodudilihgro*rh d¡ckcncdb) rn cqurl ¡mountin bothi'rürsl|_"l.¡rn.l scniccs.'lhcrcsis, hoñc\cr,¡ muchbiggel slo$downin ouipurgrosrhin indusrn- ¡ftcr 1973n grc\ ontl h¡ as t¡st is scNiccs or¡rpur.'lhcrcsuhwrs rh indLrerirl cmplourcntf¡lt bl ncrrtv2 pcrccntpcrrc¡r. Sodc-industrializ¡¡ion, i¡ itslnrcscnse ot dcctining shrrcol cmpbymcnr in indus¡rv, bccxmc ¡ rc.rliN. Asrrgucdnborc,thcdcclinci¡ldrcDümbcr ot indusrriitj¡)trs ill Ii¡Í)p( riicr 1973\1¡s¡ rcllccrion of ils prrtieullrlv slowgro\frhot indLrsúiil ou$ur.Orrc :*rihihi,** jriinif[r;l.l"ruü u'lntr ir üi{ "Hil"f,:r';'."illlHr iii:lil,Illi;r;:#i.ti'.1r#Ht;: ".r#i ",,,';*,í:U*:rn* ji:*:.]il*iil+:i rr"'*":ll;* ;';;iiü;;;'i;; $,;;:' [:;;;'i:li]$ütin:]filill $:riT}:F! chrngDc-indurtrja|z¡tionand slructurrl il*;,lf#iT:*J*;.lxlr$i'i*'i:hT ili#il:üfi wnhlttr stowdown )a6 Captns .)* .rtl.n-i"'- ^f -..,,f..n'r.r rs l¡.uroDtin lur^Ñán : . \ D l i n ¡ r i n nm i ! . 1 ,htc ¡ d r c l i n ri n n ¡ r t \ l { r s n l m r n r r t r c " r n ' r ' l \' n d u srn¡h/'ng d r { f r a m D ú ñ n ú m n r i n . r c r ' i n g J ¡ P r ¡ n J t r . c d ¡r",lu.-r' , n c \ L h of factory :;; i;;;-.l.ot,", r?). A f¡miliár rory iD EuroPch's bccn for some "i.',,;"; ^;" ."."";'" ," ,isinsimports$hilc thishasbccnimportant i . ' , , , ' " . " : ' . . , " " 1 ' " it*' ,t . r h . U K s u . h J i r r ' ¡ I n - r ' l m r r l c r s I F n o r x n p l i c d r 0 ti"nr Ihc I:l L Fh( lmm $Js i."'.1-. .'. " 'a¡,,i..l.l,' .i¡ trs ^; nr.rnrrtirrun' 'I'hcscnct crportsrcprtscnlcdn constant i;iri.l' i', l9z:r t,, s9Z¡illii;n in 1987 cxplain andthusc¡nnordirccrlv prcduction (?ocf ccnt)sh¡rcofm¡nuf¡cturing thc was i¡ct('r imporunr Onc il,J 'r"'" -l,"tr, ot inrlustrirlout¡ui in lrrropc S i \ \ . l l " s ' , , ' i ' l ' , 'il. * ' , " , . , s h i - h ' h r ! r ' ' r ' ( ' t ' J r n " r h ( r ( ' ¡ r n ( ' r i " n ' n c c , ','"';.1 'r;,'. iNA'nr(nr s,lirTrñt"rrinn¡Ichconrcnrr¡t(Jñn indusrnal a sln" gro'urhofinvcstncnr\illhold back ",i,¿.'.i''i.".i1""'-.' -¿ ¡uil,1ingsi, bc ¡hl consumcrs¡rc ll¡all\Jhitti¡g also i',¿"t,r¡f *tp* gio'"ttr' lt mav scniccs(in additionto hÁlingt0 morc relatilclv of rosartlsthc consumption f¡r cof and rcl¡tnclrlc¡din81o grc*,lo*ll ",'."r" f* t¡"- "i."¿ucti\i$ hJsnd Jcr rl-rr lhi' r¡gg's¡' 'r'rJ' K rhc L for ( orc l l""c'.¡ nr( in. ¡csJ ' u s h : ' ' n u r r r ni n U C C D l " s i n r n m c a r l i h r l c g r c . r,'in'.'¡..',¡',"",1 r c f m sr h c U K c i s c m ¡ v n o t b c N p i c r l l u r i N rh I l o r o p c i o r t h c \ ! c ¡ k n c s so l i n d u s t r i ¡ o ,rll"rc"c, t¡c pr"ciscir""son ;r¡ i,," "r i"¡i".i,r iobs t'as hid ' nr'ior i¡nucnccon drc c\tcnt of in ;,,crc*" ln hothJ¡P¡n'nd rhcUSA,\hcrc m¡iofincrcascs ""cmplov"rc¡¡ in 198? hishr \1¡s cmplo)mcnr """'rii"i."", "-" "*¡¡cd, ro;l indurrial it $asmole thanl5 percenr i¡"n ii' tqZ.¡'i" lr"'p" ,"ith nassuncmplor-r¡cnr {ith ¡hc severclloss countrics thosc $as in i."t.. florco'"., "¡Lin luroPc ir thar aDdlrrancc) Ncrhcrl¡üds Irchnrl, (Sp¿in, lSclgiurn. UK, 01n 'rstiil iol)s (sLrch ¡s ihc cornrrics ofrhcsc somc grcarcst. In sas ,l .i'ir" i" "'*-1t"u."", fall was no úcrc f¡c¡ th¡t thc <lespirc rosc ,*mplovmcnt ÜL ^'i Ñ.t¡"¡i"¡.1 in ic*iccs ".ploy-"nt groqth ar .ll. \\hr shouldrlrt lossof industrialiobs h¡vcnroreds, Llctsr*) heir'\ill' ¿rcoften so'kcr"¡rc rLrl'-rimc'l I h'esrcatm"iorrnof i'1dLr'rn¿l ñlrl'c c(onoml orhcr sccr'rs 50(Lrñcr i-Ju'Irirlsork ¿ndnn' rrrn\ftr¿hl(rn concentrared.rn geographicall! Moreover,i¡dusrrial emplovnentis oficn thrs p.rricul¡r areas.Whcn lhereis a majordcclincin industri¡lcmplovment throughbut only rctirc, liortcrs cannorbc achiercdthroughnaturaleastageas of vhicii throrvlargcnumbers plantclosurcs f"rg"-*"1. *¿r"¡*.¡iand mlrkct. miikllc-agcdrvorkcrson to the loc¡l labour In n.i,iciole" dcclinein industrialcmplormentcanbc offselbv inc¡easing is ".pln'."ni in se^ices llo\¡evcr, if lhc indurridl dcclincis dccp' this r c \ r r L r ¡ n r ' ' n d s h ñpr' \ ' a l r h ' J J c r ' : n n ú n l i l l h . l l o ' r" e n i L ce m f l )' m r n r . i n or c'onomi rhc rround Lnrrñrml) is nonul¿tion b¿.cdanJ sprc¿dtclrrnch ¿"i"i¿'.' "" incnmc'ro rn¿r,r g'n$' lessin ¿rcr"l r¡l'ins indurr'¿l .rirr.'*""r. I' rf¡-rf^rc h.r lirrrid p"'nrrrl fnr "rf'c'rinLgc'gr¡phicallv manyofrhc rcs scn'icciobsale conccntratcd iob lossesin indusrry'fi'lorcovcr, rtmcn ¿raNnbackintolhe br married fafl-limc, andarc frcqucntlyoccupicd ¡'labour forcc.lt is for thcscrcasonsthatIossof indusrrirljobsh¡s pt¡vcdsuch ¡n impof¡n¡ rolc in thc riscin uncmployñcnr. iuorcolcr,sinccnr.¡ rrc nrcrc dependent on industr;aljobs thanwom€n, rhcdcclinc ¡r indusü;¡t cmpbymcnr hada particularlylargeeffecron maleemployncnr. Wooen's and mcn's employment Since1973women\ cmploymenr h¡s beengrowingmuchfasrrrlhan mcn's. Similartrcndsahoapplicddurinsthcsoldcnagc(rhoush not in JapaD wh0rc themassive rundownofagriculturcreduccdwomen,smcasurcd particjpatbnin ihe labour force),bur rhe discrepancy increascdafrer 1973,as thc cascof Europeillustr¡tesparticularl!sharply(rable14.8).The reasonwasrharsery;ccs employmentcontinued ro increaserapidtt shite industriatcmploymcnr collapsed. Sincearoundtwo-thirdsof women,snon-asricul¡u¡st cmptoimcnr wa¡ in senic€sin 1973,while a slighrmajoriryof mcn werc in iDilusrry,rhc collapse in industridemployncnthit mcn muchharder. So men'scmploymenr fell¡fier 1973,whitcwomcn,s aciuay roscir I pcr cenr pcr ye¡r, which wasAr¡,r rhan hcforc I97J. Dcs¡irr rhis, rvonrcn's unemploymenr roscfafer thanmen's_ The cxpl¡na¡ionis th¡r wonrcncnrcfe.l Table14.8 OECD-€urope wómen s añd men s employñen! 1960 87 láverageannu¡r perc6ñlageg¡ówt¡ fatesl t960-73 r973-87 02 1 9 6 07 3 r973-87 0a t 6 08 06 or rs60-73 r973-87 1 9 6 47 3 197387 03 a2 1 l -l5 1 9 6 47 3 20 I L -a¡ 1 9 6 47 3 0 l D d a ¡ o ¡ u f , e m p o y ñr e rde r r o ó v e r á q é ¿ r ó u a t cnhpaeiroce¿ i G q e 6 ñ p r o y ñ se¡ r e , ú y r @ m ú r n e s D a r á t o rr o l ae ñ o o y m e ri r u o ! ¿ l r r r r u r s sour.eOECDsdro,.¿/S¡á¡n,¿s 03 03 00 03 0 l 03 -t 5 -t 2 09 1 2 03 00 248 Copngi:th theSlawdówn uncmplovwomen'smeasurcd rhelabourforcemuchfas¡erafte¡l973 So ehile in'hidden üll ¿ subr¿nti¡l w¡s al'o rhcre consrder¡l-lr, $a' rhc men *orl For p¡irr Pos'ion *omen r."k "- ;";r .o,e ;.;;1,':.";i and probabrvsone incrcascin hidden ; ;;;; "nemprovmcnt ;;i.;f;;; $orkcrsiook earlvrctiremcnt' industrial m¡Lc "t reJu¡dant '".^¡"1-"* Profits ofrccession offrc6tabilitvrftcr 1973broadlvfolloryldthephascs Thc coursc prñrir rJrcduring rhe of {frc-rhcnnse-d^c dcicrihed ,^.i"-*'¿" i",¡ anoüer' lqTq br recotcD ]óii-i i'"" .1""".'r¡r, rhcre$¡s 'omcmodesr second Ihc suroundins irrrduringthc rc(ession it;;;;:iiJ.;.';. as {ccs rhc For orrccorcrv bpi"C".ii" i".," ''". r;io"cdbv"náhcrpcnod ¿nd lc\d' irs lqTl 'csaincd nn' ii ¡""r""'i"i,.,""'*'";i,"rc in lqsl h"d'r;ll asto Ine bclow5om(clucs proñrrJlewasslillonc-qu¿rlcr rhcm¿¡ufJcruring in rJbhra q shkh rhoq( ¡nabsis lhc irom i""." src¡ned ;;",;;';;;;i'"; rcrl q¡gcs ¿ndIne i'o* .h,ncc. :n rhc plrrcrnñf úrnqrhol fr'du('ivirv Pr)rit¡bilitv "ró.i-."i1,"1 '",¡, havcconnibutcdro thc shirtsin business rv I gosiáj I;1"!ü -*a po*tus" bctrr¡ Acc busnesspro¡rabrr rabre14.eFácrors r 9 6 5 7 3 r 9 ? 3 - 3 7 r 9 7 3 - 7 5 r 9 7 5 - 7 9 r 9 7 93 2 1 9 3 2 - 3 7 t r l L ¿ b a up , rodúcrviv 1?rFé dve consuñer thces 1 3 l F e á r i n c o ñ el ls) 1 2 ) L4lRealwaqes l5rWase share14) ,al 32 03 30 35 0u i5 05 wagesharcto fallslighllrandthc proñtsharcto cdgeupsards.Ilut thel did not rhesumciendv slowlyto maint¡inthcprofl¡ratcasrheltcndin thcrc¡l1)l]tpurcapilal ratiodcteriorated. Wilhin ¡hc wholepcriodsince1973thcrc havcbcc¡ri'nporrantch¡ngcsin pro6ttrends.'fhc fall in profirabili¡tduringthc 1974-5 rcccrsionwis much morescvcrerhánduring 1979-82.This \las borhbccauscthc prcht squcczc in rhe fonncr pcriodand becauscthc ourput c¡tiral r¡rio 'I d€teriorrted morc. he mainrcasonfor thc lessintenscprohtsqucczc$rs th¡r w¡s fcll aftcr1979bu( licptrisingaftcr1973.In ncirhcrsi¡ua¡ir)n realwagcs 'l prolitrbilitr. his wrs therc'.oom' for re¡l w¡gc incrcrscswithoursqucczing productiviry becausc stagrr¡tcd(¡frcr 1979cspcci¡lly)andbcciuscrhcrcscrc rapidincreascs ir thc rclatilepriccofconsumergoods.The fall in thc ouqn¡rwith . vcn ourputcoincidcd caphalratiowassharper aftcr1973.sstagnant highrlte of accunulation.Exccssc.p.cit] bu;h up at ¡ muchlist$ tc ¡hin wasprcceeding 'norcurrilr. I:igrrc afierI979 bl,whichtimc accumulation 14.6illustrarcsthc relaxationof prcssureon thc proñr shrrc ¡1lter1979 l¡) doBcd down. Europeas rcalwascincrcascs Ie'"o*r"v flfiixr"-**'Nl.*-"-* !n""*"0* ffi*"n".n"- 25 23 09 _o r lcháñgen pete^ra{]eP'ns Par -0.1 tTlRealóulpúrcapúaLúro _06 lBrRearve caPrarcosrs rr l s l O l r p u r - c ¿ pl icaú' r e ñf!l . e s r -24 l i o l P ¡ o r f, a r r s6 l + r 9 ) n p€rcenl¿qe 1cháñ9e !of,c p¿ I -050 -013 Satae ánd é'ptanaran see appe¡du p 351 Thc firs¡ ¡so colunns of the tablccomparethc prc-1973pcriodof profrt süuc.zcsirh Ih{ po'r-lq?J)cah r' r qholc Thc proñrrrrf lcll muchlc* Toinr¡er \cd \lrh"ugh in rl . .cc.ndocn"d b\ rroundr) l Dcrc'nr¡8c rr¡ ,11. two pcriods'(he sharp the r¡ie ovcr samc rhc fell at r"i;o rhc ourput-c"pital ,¡" lirst pcriotlwashnhcd¡nd sli8hdyrclcrscd¡ftcr 1973 "."rit ,"*-",,f '¡"i"* isl¡ *" rvagcshaicroscsrcadilvns rcal *agcs src* f¡rcr than'rc¡l rlt¡ is iabour protluctiviryadjustcd for tbc rclativc risc oi ¡.nr"r'. norc sloelvfor the grcwsufÁciendv priccs.Aftcr 1973rcalwagcs consumei 1 9 7 37 5 1!79-¡2 F i g u f 61 4 . 6 € u r o p e a ¡w a g e s h a r e .1 9 7 3 5 a n d 1 9 7 9 - 8 21 ¡ v : r ¡ l e a n n ú ¿pr e r c e n r a ! e Jusi as the fall in profiiabilitywasIessafter 1979,so tbc risein p.ofitrbilit! w¡s gr€aterin tie erTJansion xfter 1982th¡n duringthe .ecoveryafter 1975. Againthc maine),?lan¡tion is theconsiderably slowergro\'ú oireal\vagcs¡fie. 1982,growing at lessthanI perccnrperyerror h¡lfihc prccofrhc i975-9 pedod.A¡ áddirionalfáctorwasthát th¿pricc ófcápitálgoodsgrc* rcl¡tilcly !l',rhIhcs¡owdown 250 CóPdrg ^ut¡ür-cifn¿lruri"r' ri" 'rmngl"rnJ Joqlr ¡lrrr lq82 "¡'¡.¡ ¡¡¡nrrd hc .T;llT,[l[;l li:'i¿t::.',""';:,i'1:]l'ü",.'"."-' lJ,.;:'ff: :i:iJ"li blnesAsrrh *-'¡'li't i'""¡' in ¡hcdrir'crcnr 'hc lell lcvcl hadrcs¿incd "iLii '"'? '" i' 'n t"' ""ssrnd m rnurrcrlrins "iiil':ll;;.il' -' :;J""l:l ;rTiTi ffi i,l;*llrux l"'lf;l1; Ii:Iil1'l'ilii'li lruljil;llllrl"ill¡il.lfirl""lrj':;:l rccovcrl slncc rhc¡ T a b e l 4 . l O P r ó l , rl ¿ r e s 1 9 6 0 e T l p e r c e n l a g e s l acc 1973 t987 r987¡973 1973 r987 r987/1973 1 95 t 54 t 36 070 088 1 99 132 112 056 085 205 1 60 1 63 080 1A2 348 246 r 57 045 064 291 219 15I 055 073 364 224 1 54 042 070 214 536 388 l4I 069 096 421 038 rY i6ls65lorlheaccs " l h e p e ¿ k y e du d e r L n e d ¡ s r h e v . d b e l o r c L h c a u s r a ' n e dndee' nco o r l ¿ b ro' r¡pan ind USA. 1960 ror EuroDcrrtl i9r0 r 4 . 7 M a n u l a c ' !n r q p r o l , r á r e s1 9 7 3 8 7 l p e r c e ñ l ¡ n . 'rcscn_canny ol labttut' barg¡iñhg posi¡ion- prcciscl)thc functionof thc explaincdby iUar:\.What is morc surprisingis thc f,rilurcol profir¡bili$ Io rnd grorvth ofoutpur rccovcr inJap¿n. Dcspitcthcslo$erratcof¡ccumularion tha¡ befo.c 1973,thc demandior l¡bour hasbccn mainrtincdat ¡ tcn high crcccdcd In themiddlcol1989thcratioofjoboflcrsto racancics r¡rein Japan. I for thc 6rsrtime sincc1974. fhcrc \lis ¡ slightlyslo$cl gr^fth rrrc of rhc i)r popul.tion of*orkingagcthin in thc l9ó0s(scc¡¡blcI4.ó)¡rndthcrcscncs wcrc nruch diniirrislled l)cspiLe libourwhichcouldbc drawnoutof rsricuhurc vcryligh¡ incrc¡scsin somcn'spart¡cip¡lñnnrprid sork thcl¡bournurkclra¡rs h¡mPcrcd bv $trs ilso sclcrcly vagcs continucd to risc. hrsincss and rc¡l prctcction¡nd housnrgshott¡gc,*hich pushcdlhc facrorssuchasagricultural goodsup ¿ndin(rcascd the-nonc\q¿gcincr.r.c\nc.(s\rn costofconsumcr powfrg'o$ing. forworlcrsrn lccp rhcirpur,ihrsrng l*ün*ü**íqq*tt":','.:H';,;*li*",r'':w :;#;;;;;;;;r,;;;J"a in b'.rn",, gningio *orkcrsirrhc' wcreroafforq of consumer c""q'r:':b,1,fill^il^1,.::l';::i '¡i"g *l"tl'" prices ."p;¿iy l1':?5? ml;*.i:"x"'""ml:,;,il:T'iili::ii'ii5:.T'#: P¡ofit¡bility and accumulation ir produced ¡er un;tol capiral ''l.l l*i1",.¿ falli5S3g9¡nr of.ourput In broad terms thcrc is ¡ paralleldownwardshili in ac.umul¡¡ion¡rnd profitabiliqior botbmanufacturing xndrhelvholcbusiness seclor(6grres11.8 and 14.9) Puning ¡ogetherthe paitcrns for profit¡bility with thosc ior accumuhrion for thc individualbbcs c¡rlicr vicldsan immtdi¡tc pir¡dor. In Japan,whcrc lhc rare of pro6t lcll ñost and recoveredlcast,lhc rnle ol accumulation hasrccovercdmor rnd is not vcry frr bcl¡)wthc 1973rrtc ln ;: .::ii:$T:: *::tii"l"mn:*'';'i,]::"lrl,:i',::'i:ü':'ff c¡r¡ci¡ raiinal'o 'mp'o'cJr' cYces< 'i,'.'"'ñ' .L*" ""J 't. "uDLr'capiL¿l -i':I..l.'::|':T,i::, in factorto thcprontrecovcry maiorcontributory 'work€Is in undermining unemployment f*oi. it". ü..n trt. i.pactof mass ! ¡ ¡ ! a ! F i g ! r e1 4 . 1 0 l l n l e dS t a r ebsu s ¡ e s sa c c ! m u L a raDn¡dp r o l rr ¿ r . s1 9 6 08 9 pÓll rales 196089 F i s u r e1 4 . 8 A C Cb u s ' n e s¿s c c l m u á l o na n d havcby and and massunemplovment Duropc,$hcrc rhc ycarsof srag:ration tcntrtilc !crY bccn h¡s i.e" r"rtur"Ap-nuuitlcv, thc rcco!eryof¡ccumularion rric¡rcs ' i i " ' i " i i 14.10. r ' " i . r "ll.ll " " ¡ ' i "rnd r t h 14.12). isprobablvlicsinthclactthar'despitcitsshdrl .¡ still.to hNc bccn hishcr th¡¡ clscwherc r,li,;h; p;;;; ':'" in Japanappcars nf mu'r hc ren¡¡ri'cbi,auscof rhc (lilh'ul$ making ,,¡",sh conclu*r"ns qhcrc ' '31(ulation f mcrhoJ' counrrics ."."'"il'"". "i o-c"ulhn r\r^s: -'"'' ;i¡ ,';'',s" ,," In businc*rr¡sbccnhishcrthJni¡ rhc i:;clq;l rró ¡cr ccnrinJ¡pan c'rimare( , ompJr¡brc ,hc-mo'r ;,\;;;;;;",",;".;"h and ó pcr ccnt in ihe the usA and ii ;.. ."nt in cernanv ;:;;;;;ii; iñ Japanthanrn stablc morc bccn ñuch h¡s .,rrc thc p.otit Üi;Ñ:;;-"', 14,11Japa¡ese bus¡ess accuñul¿l,o. andFror I ralls 96089 Fiqure 3 ¡ ! ! profu rates' 1960 Flg!r. 14.9 ACC ma¡úlactu¡¡q accÚm!al on añd 89 lncrl)r in srrbilizing c¡rtirilitr $hichis in imt)(trri¡r mostofd)corlrcrcountrics, 14.7). conñdence ligurc Gec AII our daraare lbr pre-taxproli¡s,but laxarionol pfo6¡scerainly cunnol explainthe disparatcbchaviourof accunülarion.It is truc that ihc rrte ol corporatetaxÍion scemsto h¡vc bcenlowcr in Jap.n thin in úc USA ¡nd Germany, but not thanin thc UK. Moreover,therc{trc no cutsin corporrtt thorc tax in Japanwhich could hclp ¡o c\Tl¡in thc upswiñgin accumul¡rioD (table11.11). It is clearúat thc powerfülupswingio thc rnteol !.c mul,tion in J.p¡n it rheendofthe 1980s- al abouithrecdmesthc ratein rheUSA or DuropeGce ofproli¡abilityAlicr by thebcháviour t¡blc 14.3)- cannorbe sholly €xplained a breathinBspaccin thc larer 1970sand carly l9tiOsthc strongtcndcncy E t [,ezs Nl,ei? Eliess u5a EuroPé F i g u r e1 4 1 5 S h a r ep r c e s . 1 9 6 0 - 8 8l r € l ¿ l r v leo ¡ e p a c e m e nvt a l u eo r 1 9 6 0= 1 0 0 ) wherc oiproduc¡ion(sccchaptcrl5). But outsidcmanul¡cturing, organiz¡rion is cvcnhighcrdesphemodcrategro*lh in rhc home rhc rateof accumulat'on hxs a subst¡ntially markci,ir secmslikcly rh¡t the boom in .eál investment andso on) Wnh a muchlowcrrate characlc.(propcrtyinvcstmcnt spccularile of prolir from producdre&tivit) than previously,in m¡nufacturingand of largec¡pital scnices,the cxplan¡tionfor high sharepriccsh cxpect¡tions suchasof6ccbloclsin ccntralTokyoA hcldby companics, ganrson thc assers 'l f¡ll in sharcpriccsin okyoof somc30 pcr cenrin rhc lirst quirtcr of 1990 sLrggcrs rhit rhis¡ar¡iculrrbubblemayh¡vc burst ttrc Lú"u¡i! (lu Augusr 1990) cnrphrsizcclthc significancco| shaky propcrt!,nd sh¡rc m¡rkctsl ¿ndshrrcs .l¡p'n\ hugccomNrcirlb.rts úc clughlin thcspiral.It Propcr.r l1!ll,v)nril¡hrtl,r\...A.lrt.icsccrrsh.dúldbeQmc¡Sldbnlonc,¡sandvhcnit cirhc.f¡rccsloc¡l hdnLsto e¡t dlcir lc¡dingor, hcavcnliúbid,ir b¡nlGst¡n rLrgo bur l:ighrofrhc world\ tc¡ biEgerbants¡rcJap¡nescirhcyaccounlfor .lmor t 0 ' 2 ,o f i l l c r x + h o r d c r b a n ll o ¡ n sa n d¡ s i z c d b cl ch u n ko f d o m c r i cl c n d i ¡ gi n ,\,¡cricr ¡¡d Brir.in. l hc súddcnlossól th¡r {ould be disastrous 'li, md.r,Jut¡n's comnrcrci,lbrnks look inprcgnablcBu¡ ¡hcy hav¿hadc lo¡ns düecrlyto domcric Propc¡tyrnd consrrlclron, 20'l. of rhcir outs¡¿nding is i¡clud€d Wo6e,lhen abilitvro mairrain andaruund30',l,iiindircct cxposure comProniscwhen crdi lines dcpendson rhc rockmárkcr.In ¿ scandalous for Ibternational w€rc underlh€ Bánk rulcs ¡8reed capilal-adeqú.c) intcrn.rioñal banksafc ¡llorcd to coúnr45% of unrealised Scrrlcmcnhin Ráslc,Jápánese gainsor shúc inverncnts¡s crpital.Lverv¡imelhc Nikkei'sfall makesthose s¡inssndlhr, rhebantl capit.lshrinksand só núr rhcirlending ls rhcrc a link bc¡vccn rhcsc rarhcr di\ersc indicatorsol nnrnci¡l vulnerabiliq- highcrgorernmcntdcbrratios,incrc¡scdconsumcrborrowing, wcalcrcorpor¡tcbalanc€shccts,troublcdñn¡ncialinrirutions,rc¡l in\csr¡rcn¡ dishrtcd bv spcculativc considcrations? Thc commonthreadis thrt thc! ill developed, ahhoughccrrainlyto r diffc.entcxtcnrin diffcrcnicountrics,i| a situ¡tionwhcre¡he cxistingprofi¡abiliry of producrivcinvcstmcnr h.d lrl10n, andconfidc¡ccin thc sustfincdgrowthncccssary to ¡raintainarrdincrcasc(hir pro6tabiliry hadbeencrodcd.ln thissenscrheturbulcnccofthc l5 or so ycars prior io thc rccoveryoi the la¡cr I980s,the reflcctionof ¡hc basicforccsol' over¡ccumulition, has lcli a dccp imprint on rhc lin¡ncialrruc¡urcs of rhc ACCs.