boom and bust

The permanent arms economy and the long boom

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Economy Class

The long boom that lasted from the 1940s to the 1970s was the "golden age" of capitalism. Today it is something only glimpsed in episodes of Mad Men and old movies. Yet this golden age did exist with full employment and rising living standards and the creation of the welfare state. It was an age of consumption and there was a widespread feeling that things really could only get better.

What Causes Boom and Bust?

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Gordon Brown used to endlessly repeat the mantra that, thanks to New Labour's policies, there would be "no return to boom and bust".

That looks laughable given recent events. At least it would be funny if people's lives were not being savaged by recession and cuts.

In reality, the history of capitalism is one of successive expansions followed by collapse. Today's apologists will have to choose their words more carefully given the objective reality of the crisis. Yet during booms when new buildings go up on a grand scale, high street sales increase and unemployment falls, enthusiasm towards the market seems to correspond to an extent with reality.

The emperors, and their clothes

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Two new books on the state of the economy expose the speculation and greed that have propped up Gordon Brown's so-called boom years

What a difference a year makes. The conventional wisdom at the beginning of last summer was that the economy was performing wonders. Graham Turner, Larry Elliott and Dan Atkinson were among a small minority of economists and commentators prepared to say the emperor had no clothes. Now everyone can see that they were right.

Economic crisis: Capitalism exposed

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Every time economic crises develop they are described as aberrations in an otherwise rational and balanced system. Chris Harman looks at the roots and implications of the recent credit crunch, and explains why crises are in fact an intrinsic feature of capitalism.

"Investors are no longer worried whether certain banks have enough cash. They are worried about the risk of a US or even a global recession." So the Financial Times summed up the fear of those who live off capitalist profits on 18 January.

Mainstream economic commentators agree on one thing: the crisis that began in one section of the financial system last summer could be about to create chaos through much of the capitalist system which they support.

The global economy - solid as a rock?

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The recent ructions in financial markets and the collapse of Northern Rock have a familiar ring.

Whether it is the crash of 1987, the housing slumps of 1989-90, Asia in 1997, the hedge fund LTCM in 1998 or dotcom meltdown in 2001, the world economy has been grappling with a succession of financial crises.

And yet, each time the global financial apparatus has withstood the onslaught and, it appears, come back stronger and more robust than before. Encouraged, the major actors in this evolution of unfettered markets - financial institutions and their shareholders - have taken on bigger, bolder and more aggressive bets.

Blair facts and Brown noses

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"The longest period of uninterrupted growth in the industrial history of our country." So claimed Gordon Brown in his budget speech. This supposedly miraculous economic record is one thing on which the Blairite and Brownite factions of New Labour agree. Except it simply is not true.

There was a far longer period of uninterrupted growth, lasting 25 years, from 1948 to 1973. It was also at a faster rate than we have known under New Labour. The Cambridge Economic History of Modern Britain reported that "from 1949 to 1973, the UK economy grew at an average rate of 3.0 percent per annum." Growth has only been at an average of 2.3 percent since 2000, according to National Institute Economic Review (NIER) figures.

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