"/.../for a while, this worked. In the late 80s higher profits were associated with an investment - and indeed employment - boom.Stumbling and Mumbling, "Thatcherism vs wage-led growth", 12 maj
Thatcher’s class war was, then, a success.
But only for a short while. My chart shows that over the last 15 years or so, investment has fallen as a share of GDP even though profit rates have increased.
Thatcherism - understood as the idea that a quiescent working class and high profit rates would lead to good investment and high economic growth - is therefore dead.
Viewed in this context, calls from Duncan Weldon and Brendan Barber for wage-led growth make some sense. After all, if bashing the working class hasn’t raised capital spending and economic growth, maybe enriching it will."
jfr 23 nov 2010, "Höga vinster utan motsvarande investeringar", 6 juli 10 "Företags profiter och sparande"
Om löneledd tillväxt, se också Engelbert Stockhammer.
Uppdatering 19 januari 2012
"Is the pursuit of the return on equity damaging capitalism? Robert Jenkins of the Bank of England’s Financial Policy Committee has already answered this in the affirmative (pdf) for banks. But might it also be true for the wider economy?"Chris Dillow, "Challenging Capitalists, or Workers?", 4 januari 2012