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I need acknowledge no such thing. Oil price shocks put stress on the UK economy and revealed the rigidity, nay, the rigor mortis of its labour market. This made it difficult or impossible for many segments to adapt to the new economic reality. Take the car industry, for example. Oil prices double so some of the inputs to car making are more expensive, thereby making it more expensive to produce cars. Car price goes up. People aren’t buying as many cars because the car price just went up and because petrol prices have doubled. Car manufacturer can’t cut costs since it can’t lay-off any workers (as per your own example!) Car price goes up again. Translation: rigidity in the labour market was a key component in the 25+% inflation the UK enjoyed during parts of the 70s.
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Care to guess why? Could it be, perhaps, that the key advantage of “high technology production methods” is that they allow better products to be produced with less labour input, i.e. fewer workers?
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Well, this was my original point. I’m glad you agree. My secondary point was simply that, while controversail and polarizing, she simply wasn’t universally loathed. I would have thought that this would have been obvious from the string of election victories the Conservatives put together, despite the fact that a vocal minority firmly believe that she was the demon prime minister from hell, roaming the countryside seeking whom she might devour.
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I guess so, since she was. She was re-elected in 1983 and 1987 and the Conservatives were returned to power whilst advocating her same general policies in 1992.
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First, I’m not an “MT fan,” as you put it. Nor am I a rabid, hate-filled MT detractor like Tony Parsons. Are you suggesting that the economic situation in, for example, Germany was equivalent to that in the UK in 1979? Are you suggesting that the German trade unions were anywhere near as militant?
** This is just weird. Yes, you’re quite right. Suppose, instead of breaking the unions, the government just caved in and gave them whatever they asked for. Massive pay rises, iron-clad guarantees against lay offs, increased public spending, artificial price caps to control inflation, etc., etc… How can we possibly say what would have happened under those conditions? It would all be just wild speculation! casdave, there’s an old saying, “The race is not always to the swift, nor the battle to the strong . . . but that’s the way to bet.” We have a pretty good idea what would have happend if the unions had won.
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Yes! And buggy whip manufacturers and gas-light factories, too! You have yet to expalin why it’s such a good thing for an advanced economy to maintain dirty industries that it’s not competitive at. As for the idea that all these companies would be gushing money into the public fisk, well, that’s some pretty wild speculation, right there. The majority of government-run companies anywhere are inefficient and usually a drain on ratepayers in terms of high prices, bad service and direct transfers of public money to keep them afloat.
We have lower unemployment. We have a more flexible, dynamic economy. We have lower inflation. We have a budget surplus. Good heavens, man! Would you really change places with Italy if you could?