Full text: Growth and Stagnation

This type of concern ran into difficulties in the 70s, 
superficially because of what it produced - steel, motor cars- 
but probably also because of its internal organisation. 
It provIS^unsiiilble for innovation, for R&D work? the 
research staff tended to leave the big concerns and 
go to smaller establishments where they found a more suitable 
working climate. In the smaller high tec indsjutries there 
arose a new type of manager, inimical to hierarchies, 
to mass organisation, to trade unions, government and 
i 1 •' 
all kinds of bigness. The importance of the changes 
can bejdocumented by reference to the well known fact 
that the big concerns in many cases try to reorganise 
by dcentralsjlation; the aim is to give the managers of sub-units 
as far as possible an independent position ressembling 
that of an entrepreneur. 
What has to interest us especially in the context of stagnation 
is,however, a very peculiar shift of interest in industry. 
Many of the big concern^have shifted their interest from 
production to finance, real estate and speculation. 
Instead of investing in machines they invest in bonds^- 
or in real estate. They speculate in foreign exchange. 
And from time to time, they engage in take-overs, they raid 
other firms, hoping to gain by aquiring assets which fetch more 
than the price they paid for the share of the company taken over. 
The price of the shares is bid up by the raider, it is paid 
by bank credits or by the sale of "junk bonds", bonds which 
are not tradecj/on the exchange and which carry a very high yield. 
The effect of the merger is that the share capital is replaced 
by debt. This is reinforced by the strategy of those concerns 
who try to protect themselves against the threat of a raid:

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