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Thursday, December 13, 2007

The end of the Anglo-Saxon model of capitalism?


Seumas Milne, in The Guardian 13 December 2007, explains the world's current economic situation - This crisis spells the end of the free market consensus

For a number of years, there has appeared to be a boom in the USA and much of Europe.

Milne explains that this boom has relied on cheap labour, cheap goods and easy borrowing.

The collapse of the Soviet Empire meant that there was much cheap labour from Eastern Europe.

China and India have provided cheap labour and cheap goods.

Banks have been happy to hand out lots of money.

Milne writes: "Along with the wider weakening of organised labour, the deregulated expansion of international finance and a flood of cheap imports into the rest of the world, the result has been a corporate profits bonanza and power grab which has shaped the economic and political temper of our times."

Times are changing.

The price of oil and certain other natural resources is going up.

Inflation is building in many parts of the world, including China.

Some banks are in difficulty.

Many people can expect a fall in living standards and an increase in unemployment.

Milne writes: "The end of the long boom will have a profound ideological impact."

Martin Wolf wrote in the Financial Times, 12 December 2007: "What is happening in credit markets today is a huge blow to the credibility of the Anglo-Saxon model of transactions-orientated financial capitalism."

It must be time to throw out the bad guys and bring in a more honest set of people to lead our institutions.

~

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