the Lawson boom in the late market is record trade
••• As in the USA, accountants have, like the Roman emperor Nero, continued fiddling as the economy burns sector is generally agreed to be the key source of many of the technological innovations which can raise productivity levels over time.
n addition, the weakness of manufacturing has contributed towards the
other two imbalances described above. The shift to services has concentrated economic activity even more in the South East of England, fuelling the house price boom and creating transport congestion and environmental damage. This has worsened labour recruitment problems, particularly in the public sector.
Service sector growth has also been based on an unsustainable consumption boom. From 1997 to 2002 UK household debt rose from 90 percent of annual disposable income to 109 percent.
By 2002 household savings had fallen to 4.5 percent of disposable income from over 9 percent in the earty 1990s. In large meas ure it is worry about whether such levels can continue which is at the root of the decline in share prices and the consequent cutbacks in pension provision by compathat inflation remains relatively low compared to the Lawson period, but growth levels are also lower and government borrowing is higher. The worry for capital is that there will be a collapse of consumption leading to stagnation, which may be worsened by a fall in the pound, which would push up inflation and maybe lead to rises in Interest tales
Orthodox observers have described the current problems extensively, but have found it much more difficult to analyse why they have arisen. How can an economy which was praised by free market economists only a year ago now appear so unstable? It is here that Marxism can offer answers where neo-liberalism can not.
The central problems for British capitalism remain those of generating profits in the process of production and of realising those profits through stable accumulation and growth in the economy. The long-term weakness of the British economy has meant that attempts to solve one of these problems have continually tended to make the other worse. growth levels are increasingly dependent on rising government spending, much of which of course finds its way to private companies through PFI and PPP schemes
But the long-term problems of British capital, at least of that section of it located in the UK, have led to reliance on low wages, meaning that such consumption rests on